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AUGUST 2015
Vol. 7 Issue 3
Pages 100
150/-
Feature
PEBs ...36 Real Estate ...64
Trend
Oil & Gas ...60
Analysis
Power ...34 Engineering
Projects
Construction
Extensive Coverage Obsessive Readership
LIGHT
Worries power industry still heavily ridden
THE CHIEF EDITOR'S TAKE
THE CHIEF EDITOR'S TAKE
EPC WORLD
Editor-in-Chief
Was it a mute perception?
Executive Director Meenakshi Verma (meenakshi@epcworld.in) Consulting Editor
The simmering worries of future uncertainty for infrastructure sector, one of the strongest pillars of economic growth, are about to bust out. This is not just one line of thought, perhaps, it is quite visible all around that ‘all in words were just in words’ because the Narendra Modi led government has completed its honeymoon period but the expected silver-lining for the industry is missing. Nevertheless, the ongoing gridlock in the monsoon parliamentary session has also added in to hopelessness. It also resonated in corporate world after a leading industrialist and former Rajya Sabha MP Rahul Bajaj has remarked "shine seems to be wearing off " for Modi Govt. So it must be believed that something is not happening as per expectations from the government. Adding to this recently, the government backed down on its controversial land acquisition bill, which would have made it easier for land to be used for industry and infrastructure projects. It has, more or less, returned to the old law approved by the former UPA government which actually made it tougher for industry to acquire land from farmers. This is a big blow to Modi's land plans and is seen by many as the beginning of the end of reform. In fact, this shows that the government has shown a little appetite for reforms. However, industry analysts are still divided on whether Indian banks are past the peak of their bad loan problems or not. The April-June quarter numbers of some of the state-run banks indeed show an improvement in the gross non-performing asset (NPA) numbers. Similarly, after the new provisioning norms from the Reserve Bank of India (RBI) on restructured loans, there has not been a single case of new referrals to Corporate Debt Restructuring (CDR) cell in the June quarter. The question is when groundlevel economic situation hasn’t changed much, how incremental NPAs have come down and where did new loan recast proposals disappear. In our current issue we have discussed these issues for power sector, which is yet to see revival track.
Tejasvi Sharma (tejasvi@epcworld.in)
Vishwarath R. Nayar Deputy Editor Pradeep Pandey Assistant Editor Prasenjit Chakraborty Correspondent Kartikeya Jain
Head-Marketing & Communications Sriniwas Kumar (sriniwas@epcworld.in) Head-Business Development Venkatesh K GM-Sales & Mktg Santosh Rai Manager Co-Ordination Brijender Kumar Manager-Sales & Marketing Umesh Savlekar Subscription Joydeep Ganguly Design Vishwas G. Machivale Photographer Pramod Ingle
Tejasvi Sharma (tejasvi@epcworld.in)
Branch Office: 22. Vishwanath House-2, Prahlad Nagar, Satellite, Ahmedabad 380015. Tel: 079 65498497, Cell:+91 95588 83190 Published by Tejasvi S Sharma on behalf of EPC World Media Pvt. Ltd., 301, Hilton Centre, Sector - 11, CBD Belapur, Navi Mumbai - 400614. Tel fax: 022 41610808. Email: marketing@ epcworld.in and Printed at Siddhi Offset Pvt. Ltd. 5/12, Kamat Industrial Estate, 396, Veer Savarkar Marg, Prabhadevi, Mumbai - 400 025. EPC World does not accept responsibility for returning unsolicited articles and photographs. Whilst care is taken prior to acceptance of advertising copy, it is not possible to verify its contents and EPC World cannot be held responsible for the same. All rights reserved. Reproduction in any form is prohibited, all efforts are made to ensure that the information published is correct, EPC World holds no responsibility for any unlikely errors that might occur.
4 u EPC World u August - 2015
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22 COVER STORY
LIGHT
Worries
In the backdrop of trickling power purchase agreements with state utilities, power owners face a behemoth task of selling the untied capacity in the short-term markets. It is also because State electricity distribution utilities are already in distressed state.
34 POWER Analysis
Industries & Commercial Entities: Can they benefit from solar PV
coming “The up l be a big GST wil ger” an game ch uri,
S autam ctor, says G er Dire d n u o F & O CT h Interarc
Solar Photovoltaic (PV) is the single greatest topic of interest for structural engineers and consultants who are designing large rooftop spaces for their clients. To be able to add value to roofs and make them ‘power producers’ is something being considered for most new projects around the nation.
42 36 CONSTRUCTION Feature Gaining momentum
PEBs due to its distinctive characteristics, can prove to be a good option for speedy and affordable construction in urban as well as rural areas. PEB buildings are environment friendly and offer design flexibility.
likely arket is m B E P “ at much to grow e” ac higher p k Patel, riyan says P r, Directo ippon Alpha N s Ltd tive Innova
6 u EPC World u August - 2015
44 www.epcworld.in
CONTENTS
INTERVIEW 60 OIL & GAS
Negative Outlook on Shipping Sector to impact oil and gas sector
ne membra “Tensile r usage jo finds ma nd rt a in airpo ojects” pr hy, stadium namurt
h avi Kris says R ctor of e ir . ing D Manag Pvt. Ltd x India e fl e d a Sh
Offshore segment will face the negative impact of lower crude oil prices.
46
tion of “Fluctua l prices eria raw-mat constraint r is a majo ket” ar ctor, in this m ia, Dire rd ohit Ma td says M sL g n Casti Grace
48
50
8 u EPC World u August - 2015
The Road to a smarter city in Indian Real Estate Sector In the context of India, the smart cities concept is by and large a new concept. In a smart city, infrastructure and amenities such as water, sanitation, energy, transport, public safety, education and health care are integrated and managed through technology for efficient governance and delivery.
Housing segment stabilizing & office market recovering in Hyderabad In its latest report Knight Frank finds that housing segment in Hyderabad is gradually stabilizing and office market has witnessed the lowest level in absorption since H1 2014. However, office market is on the path of recovery.
80 BIG 5 CONSTRUCT
54
an rat Abhiy a h B h c “Swa owards st step t r fi e h t is te uid was ia” q li , d li o s Ind ment in manage , r Rege Samee CEO, m Ikos Mailhe vt Ltd ment P Environ
Last two and a half years witnesses a continuous drop in residential launches and sales. The residential sector is reeling under immense pressure with the majority of stakeholders believing that prices are likely to remain stagnant in the next six months, the report says.
78 Report
t is vernmen ing o g e h T “ s gly focu increasin l & stria on indu ure sectors” ct infrastru rishna Goyal,
jay K says A nt & Preside Director, g Ltd in g a Man ational e Intern u q li e g An
India residential market gasping for breath
74 Guest Article
n anizatio g r o y r e “Ev petition face com from the d sector” ize unorgan a, iraj Ary says N ector, ing Dir Manag Pvt Ltd h Bars Utkars
64 REAL ESTATE Feature
Offering right platform for Building and Construction sectors The third edition of Big 5 Construct India has all set to surpass its previous records in terms of numbers of exhibitors, country pavilions, visitors etc. Over the years the exhibition has emerged as one of the most important events.
84 SPOTLIGHT
56
Putzmeister launches the ultimate Batching Plant MT - 1.0. Putzmeister announced the launch of its Batching Plant, the MT – 1.0., with a capacity of 60 m3/h. As an in-house development the R&D team has made sure that, it stands apart with respect to design and in-built features.
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Railway Contract
News
HCC-Coastal JV awarded ` 785 crore contract HCC Ltd, in joint venture with Coastal projects ltd has been awarded a ` 785 crore contract by north-east frontier railway. The contract is for developing a 9.5 km tunnel between Tupul – Imphal for new railway line project from Jiribam - Tupul. The share of HCC in the JV is 60% which is ` 471 crore. The project is to be completed in 40 months.This is the fourth successive order received by HCC from northeast frontier railway on the new railway line between Jiribam and Tupul. The first project was to construct a 3.25 km tunnel between Dholakal and Kaimai Road stations and second was construction of a 3.3 km tunnel between Kambiron Road and Thingou stations and the third order was to develop a 4.9 km long railway tunnel between Kaimai Road and Kambiron Road stations HCC is also constructing the 4.315 km long Bogibeel rail-cum-road bridge over river Brahmaputra near Dibrugarh, Assam for northeast frontier railway.
Power approval Cabinet approves ` 8,548 cr power transmission project
Road project
The Union Cabinet approved a power transmission project worth ` 8,548.68 covering seven states including Andhra Pradesh, Gujarat and Maharashtra.The Cabinet Committee on Economic Affairs (CCEA) has approved the creation of a transmission system in these states that will also covers Himachal Pradesh, Karnataka, Madhya Pradesh and Rajasthan at an estimated cost of ` 8,548.68 crore.The project will have central contribution from National Clean Energy Fund (NCEF) of ` 3,419.47 crore (which is 40 percent of the total estimated cost of project). The activities envisaged under the project include establishment of 48 new Grid sub-stations of different voltage levels with total transformation capacity around 17,100 MVA (Mega Volt Ampere) by installing over 7,800 ckt-kms (Circuit Kilometers) of transmission lines in these seven states.The project is proposed to be completed within 3-5 years. The cost on creating intra-state transmission system is proposed to be met through KfW loan (40 percent of the total cost), NCEF grant (40 percent of the total cost) and the remaining 20 percent as state contribution.
New contracts Hero Future Energies wins multiple bids Hero Future Energies (HFE) has won PV projects of 28 megawatts (MW) under Madhya Pradesh state policy. MP floated a 300 megawatts (MW) solar power big this year. HFE was selected as the highest successful bidder in the results. The difference in the tariff quoted by HFE in the bid and the lowest tariff is approximately ` 0.59. Rahul Munjal, Managing Director of the company said that winning the bid shows their commitment in the solar sector. He also has said that HFE has won other rooftop solar projects across multiple states namely Haryana, Punjab, Tamil Nadu, Maharashtra and Karnataka under SECI rooftop solar schemes. He also said that the win has taken them closer to the target of becoming one of the leading rooftop players in the country. Sunil Jain, CEO of the company said that they continue to show their deep understanding of solar bidding to constantly win projects at viable VGFs and tariffs. He said they will continue to participate in all future bids including NSM.
IL&FS transportation wins ` 1,886 crore project from NHAI Infrastructure major, IL&FS transportation networks has won a ` 1885 crore road project in Maharashtra National Highways Authority of India (NHAI). The project pertains to widening of Fagne-Gujarat /Maharashtra border section of NH-6 under National Highways Development Project (NHDP) phase 11. The company said in filing that they submitted a big with the NHAI for four-laning of Fagne-Gujarat/Maharashtra border section of NH-6 in Maharashtra from 510 km to 650.794 km on BOT (toll) basis on DBFOT (design, build, finance, operate and transfer) pattern under NHDP Phase-IV. The company has been awarded the project through issuance of a letter of award. The Company had quoted a grant off ` 245.14 crores for the project.The concession period for the project will be 19 years including construction period of 910 days and the estimated cost of the project is ` 1,885.74 crore.
10 u EPC World u August - 2015
Port pact
News
Vizhinjam port: Kerala govt, Adanis to ink pact on Aug 17 Kerala government and Adani Ports, in a major step forward on the state’s ambitious ` 7,500 crore Vizhinjam deep sea port project, have decided to sign the construction agreement on August 17.The decision was taken at a meeting by Chief Minister OommenChandy with Adani Ports Officials, including the company’s Executive Director Karan Adani. It was also decided to start the construction work on November 1, the state’s formation day, Ports Minister K Babu told reporters after the meeting.Karan Adani said that even though the construction period is four years as per the agreement, the company plans to complete the work in two years. Babu said that the CM would write to Prime Minister Narendra Modi on Monday, seeking exemption of cabotage law for the project as it is one of the issues raised by the Adani Group.They also sought completion of land acquisition of which 90 percent is over, he said. Government assured them that the remaining land required would also be acquired. The port, a long pending project of the state, was first proposed in 1991, but did not materialise due to various reasons. It got a push after the present UDF government came to power in 2011.
Power Contract Alstom T&D bags ` 80 crore orders from Essar Projects
New investment
Alstom T&D India Ltd had bagged a contract worth around ` 80 crores. They will supply transformers for Neyveli New Thermal Power project in Tamil Nadu. Essar Projects is responsible for the EPC works of the first lignite fired 1000 MW Neyveli power project in the country. It is being developed by Neyveli Lignite Corporation. Under the scope of the contract, Alstom will be engaged in designing, engineering, manufacturing, testing, installation and commissioning of a set of generator transformers and interconnecting transformers, among others. The company has been awarded the contract to supply transformers package for Neyveli New Thermal Power Project (NNTPP). The Neyveli project is significant considering the crucial role it will play in improving the power situation in the southern region of the country. The company’s extensive manufacturing footprint, resources and capabilities will be mobilized to make this project a success.
Solar pact RattanIndia signs pact to develop solar project in MP In order to augment solar power generation, Madhya KshetraVidyutVitran Co (MPMKVVCL) has inked an agreement with RattanIndiaApna Solar to develop 5 MW grid-connected rooftop solar power projects in Madhya Pradesh. The power purchase agreement (PPA) and project implementation agreement (PIA) with MPMKVVCL was signed in Bhopal. The company won the order through competitive bidding. This is one of the first rooftop solar projects tendered in the country and more are likely to come up very soon. This rooftop solar power project will be executed on about 75 public buildings in cities of Bhopal, Indore and Jabalpur in Madhya Pradesh. Rajiv Rattan, chairman of the company said that such initiatives would go a long way in augmenting the government’s target of installing 100 GW of solar power capacity by 2020.
New launch Dr. Fixit launches Waterproof World in Pune Dr. Fixit has launched Waterproof world in Pune. The company is known for its innovation and pioneering solutions for waterproofing problems. In order to break common myths and demystify the problems associated with conventional waterproofing practices, the company has put forward this initiative. Waterproof world, first-of-its-kind retail concept, will aim at educating customer through touch and feel. It will offer an experience zone where-in a customer can get information regarding importance of waterproofing, concept of waterproof envelope, easy steps to waterproof and areas of application like – External and Internal Walls, Terrace and Bathrooms. This will also provide a platform to Engineers, Structural consultants and Architects to showcase waterproofing solutions to their clients.
Warburg to invest ` 1,800 crore in Piramal Realty Global private equity major Warburg Pincus will invest ` 1,800 crore in Piramal Realty for an undisclosed minority stake in the real estate arm of the company, making it one of the largest FDI deals in the sector.The proceeds will be used to expand company’s portfolio and acquire marquee land parcels in and around the Mumbai, the company’s Executive Director AnandPiramal said.Founded in 2011, the realty major has over 10 million sqft under development in prime areas of Byculla, Thane, Worli, BKC and Mulund of the metropolis. As a part of the transaction, the New York head-quartered firm will get two seats in the Piramal Realty board, which will be reconstituted soon. Piramal Realty works with some of the world’s leading architectural practices such as KPF, Fosters, SOM and Make and leading contractors such as L&T and Eversendai.Warburg focuses on growth investing and has over USD 35 billion in assets under management in more than 120 diversified sectors.
12 u EPC World u August - 2015
Machine techonology
News
JCB introduces telematics technology livelink in its machines JCB India unveiled JCB Livelink, an innovative technology which allows the user to remotely monitor the machine. The technology provides alerts on real time location, maintenance alerts, machine and fleet hours etc. putting the user in entire control of the machine from any location. It can assist in ensuring that the machines are operated at correct times and helps to protect them from theft. Accurate hours monitoring leads to improved maintenance planning as machines can be maintained at the most convenient time for your operation. The fuel reporting system enables operators to see actual fuel consumption, improving control of fuel stocks and planning of fuel orders. It enables the user to track the location and also receive the tow away alerts. It also remotely monitors machine health for any malfunction. It identifies and removes wasteful idle time, improving utilization and cutting fuel costs. The user can monitor the machine through sms, email or by visiting the JCB Livelink site.
Thermal commission BHEL commissions 500 MW unit of TPS in Tamil Nadu
Power Commission
State-run BHEL has commissioned the second 500 MW unit at Tuticorin Thermal Power Station (TPS) in Tamil Nadu. Tuticorin TPS has been set up by NLC Tamil Nadu Power Limited (NTPL), a joint venture of Neyveli Lignite Corporation (NLC) and Tamil Nadu Generation and Distribution Corporation (TANGEDCO). The project is situated near the Thoothukudi (Tuticorin) port on the shore of the Bay of Bengal. Earlier stages of Tuticorin TPS comprise five units of 210 MW, all installed by BHEL in three phases between 1979 and 1992.Recently, BHEL had commissioned second unit of NLCs 250 MW circulating fluidised bed combustion (CFBC) based power plant at Neyveli. The other project being executed by BHEL for NLC is the prestigious, 2×500 MW pulverised lignite fired thermal power plant, also coming up at Neyveli, which is the highest rating set of its kind in the country. BHEL commissioned 8,230 MW in the power sector utility segment in the country during the financial year 2014-15, surpassing government’s capacity addition target of 6,914 MW set for BHEL, by 19 percent.
Oil Launch Shell re-opens Rakhial fuel station in Ahmedabad Shell India has re-opened its fuel station in the Rakhial area of Ahmedabad. This latest development has taken the company’s total operational fuel stations in India to 77 of which 20 are in Gujarat. With the opening of Rakhial, the company now has 10 fuel stations in Ahmedabad. The company is currently present across six key states of Gujarat, Karnataka, Maharashtra, Tamil Nadu, Andhra Pradesh & Assam.The Shell outlet is strategically located at Rakhial Road which is one of the major roads originating from the walled city and leading up to NH-8. This path further connects with Odhav and Kathwada industrial estates managed by Gujarat Industrial Development Corporation (GIDC). The vicinity also includes some residential areas like Bapunagar, Gujarat Housing Board Colony and Sone ki Chali.
New Technology Honeywell’s new building technology improves operations Honeywell launched a new smart building technology, command and control Suite, which turns complex facility data into recommendations and easy-toimplement changes that help boost business outcomes – lowering costs, minimizing risk and reducing downtime. The technology combines intelligent automation, advanced analytics and visualization with the simplified user experience of home and mobile electronics and links building automation and the enterprise. It provides a holistic view of a connected building’s video feeds access control, fire alarms and can pull in relevant information from human resource applications.
ACME Solar commissions 150 MW plants in Odisha& Rajasthan ACME Solar has commissioned solar plants totalling 150 MW in Rajasthan and OdishaUnder Jawaharlal Nehru National Solar Mission. ACME solar is a joint venture between ACME cleantech solutions ltd, EDF Energies Nouvelles (EDF EN) – the renewable energy arm of French state-run electricity utility Electricite de France S.A, and Luxembourg-based natural resources saving group EREN. EREN Renewable Energy and EDF Energies Nouvelles each hold a 25 per cent stake in ACME Solar. Located in the Thar desert in Rajasthan, the 120 MW project (under JNNSM) is a combination of five photovoltaic plants equipped with 6,12,000 solar panels. Besides, located in the Sikuan area, the 30 MW Odisha solar plant comprises 1,17,000 photovoltaic panels. With a total output of 150 MW, the solar plants will provide energy to more than 90,000 Indian homes. The solar market in India has been steadily growing for several years and is now undeniably a competitive solution.
14 u EPC World u August - 2015
Steel online
Solar felicitation
News
Punj Lloyd Infrastructure felicitated at Solar Power Summit Punj Lloyd Infrastructure Ltd, a subsidiary of Punj Lloyd was felicitated in a solar summit in Chandigarh by the Punjab government and Punjab Energy Development Agency (PEDA). The company was felicitated for commissioning of its 20 MW solar power plant in district Mansa, Punjab and for committing further investment in another 20 MW solar project bringing its total portfolio in Punjab to 40 MW.Among the attendees were Punjab’s Deputy CM, Sardar Sukhbir Singh Badal, State Renewable Energy Minister – Bikram Singh Majithia, Joint Secretary, Ministry of New and Renewable Energy, (MNRE), Government of India, Punjab Government Principal Secretary – Power, Chief Secretary Punjab, CMD of Indian Renewable Energy Development Agency (IREDA), CEO PEDA, among several chieftains of the industry including MrAtulPunj. The company was one of the developers who had commissioned the project one month ahead of schedule. In his address to the audience, Punj attributed this success to the healthy execution environment provided by various Punjab Government agencies and particularly lauded the proactive approach of the Minister and officials of PEDA.
Oil investment ONGC to invest $8.8 bn in KG oil and gas finds
Oil Awards Petroleum Minister Gives PetroFed Awards
State-run Oil and Natural Gas Corp (ONGC) plans to invest over USD 8.8 billion in bringing to production its muchtouted KG-basin oil and gas discoveries by 2018-19. The company has divided 12 oil and gas finds in the block KGDWN-98/2 or KG-D5 and gas discovery in an adjacent G-4 block the Bay of Bengal into three clusters to quickly bring them to production, a senior company official said.The 7,294.6 sq. km deep-sea KG-D5 block has been broadly categorized into Northern Discovery Area (NDA – 3,800.6 sq. km) and Southern Discovery Area (SDA – 3,494 sq. km). The company plans to develop the 11 oil and gas finds in the NDA together with one gas find in G-4 block at an investment of USD 8.843 billion. ONGC plans to develop the discoveries in the block in three clusters — 14.5 million standard cubic meters per day of gas for 15 years from Cluster-1 comprising of D&E finds of NDA in KGD5 block and G-4 find in the a neighboring area.
Petroleum minister Dharmendra Pradhan presented the annual PetroFed Oil & Gas Industry Awards for 2014 for excellence in performance in various categories. K. D. Tripathi, Secretary, Ministry of Petroleum & Natural Gas was the guest of honour at the ceremony. The 12 awards given away were in 11 categories for performance during FY 2013-14. Indian Oil bagged the Leading Oil & Gas Corporate of the Year award for the fourth time in eight years. It also bagged the Oil & Gas Marketing – Company of the Year and the Human Resources Management – Company of the Year awards. In the new award category, Game Changer – Oil & Gas Company of the Year, they were conferred a special commendation jointly with LanzaTech Inc. in recognition of their special effort for ‘Pioneering R&D’ in production of omega fatty acids by algae using acetates produced by fermentation of carbon dioxide. The Woman Executive of the Year award was bagged by MamoniBasumatary, Senior Manager (Technical Services) from IndianOil’s Guwahati Refinery. The Innovator of the Year – Team award was bagged by the eight-member team of BPCL for their indigenous development and commercial application of cost effective gasoline sulphur reduction catalyst additive for Fluid Catalytic Cracking using spent FCC catalyst in refineries.
Essar Steel eyes ` 640 cr sales through online platform Essar Steel has launched an online platform for both buying and selling the alloy and other related products, which it claimed is the country’s first such offering in the metals space.The online platform is called e-hypermart. It is primarily aimed at its dealers/ vendors – is an extension of its retail arm hypermart launched in 2006.The company said it hopes to clock USD 100 million in sales from the platform in the first year of operations, which will be formally launched on August 15. It hopes to corner 30 percent of sales from Hypermart through this platform. Currently, a sale through the Hypermart retail channel contributes around 25 percent of the steel major’s total sales. Out of the total sales of 4.5 million ton, the retail trade constitutes around 20 percent. Though this is a B2B platform, Essar Steel executive director for strategy and business development Vikram Amin said, they expect retail trade also to take place on the online platform.The company has already roped in as many as 3,000 anchor customers on the platform and it hopes to take this to over 10,000 by the end of the first year of operations.
16 u EPC World u August - 2015
Power performance
New appointment
News
S Gopinath takes over as executive director of BHEL Tiruchirappalli complex S Gopinath has taken over as executive director of the BHEL Tiruchirappalli complex comprising the high pressure boiler plant and the seamless steel tube plant located there and the industrial valves plant at Goindwal. Prior to this, Gopinath was the executive director of BHEL’s power plant piping unit at Thirumayam and the piping centre at Chennai. He succeeded A V Krishna who retired on superannuation on July 24th. He is a graduate in electrical engineering from the national institute of technology in Kurukshetra and joined BHEL in the 1979 batch of graduate engineer trainees.Gopinath has to his credit, the planning and implementation of major modernization and capacity augmentation schemes involving investment of around ` 1500 crores at BHEL's manufacturing units at Tiruchirappalli and Bhopal.Gopinath has undergone training in Robotics in Japan, travelled to the USA and the Netherlands for selecting some of the world's best machine tools for BHEL and has undergone training in management at the Indian Institute of Management (IIM) Ahmedabad and AIMS at Manila in the Philippines.
Real estate investment Edelweiss invests ` 200 cr in Saya group’s housing project
Foreign investment Vikram Solar opens new office in Johannesburg
Saya group has raised ` 200 crore from financial services firm Edelweiss group to fund ongoing housing project at Ghaziabad. The company is developing a housing project at Ghaziabad in Uttar Pradesh on 5.25 acres, comprising about 1,600 flats. Group Director (Finance) Manoj Jain said that the investment by the group is in form of a term loan. The investment has been made by Edelweiss group firms ECL finance and Edelweiss housing finance. Ghaziabad-based Saya group is developing various housing projects in the NCR region with focus on Indirapuram and Noida/Greater Noida West. The company would invest about ` 1,200 crore on the ‘Saya Gold Avenue’ project. The construction has started and the project would be completed in the next 3-4 years. The financial closure of this project has been achieved and the company would not raise more funds for this project. Saya group MD Vikas Bhasin said that their organization is developing over 24 lakh sqft in Indirapuram and abour 11 lakh sqft in greater Noida west.
Vikram Solar has opened its third African office in Johannesburg. The new office complements the company’s existing branches in Kenya and Uganda, and is aiming to increase the company’s market presence and proximity to its customers throughout Africa. South Africa is currently the continent’s largest photovoltaics market. The country’s installed capacity is expected to rise to 8.5 gigawatts (GW) by 2030, which, according to estimates by the company, will require investments exceeding 20 billion US dollars.The International Energy Agency (IEA) predicts that by 2040 the total capacity of renewable energy in Africa will reach 173 GW, around 20 percent of which will be generated by solar energy. According to Solarbuzz, in the solar sector alone projects with a potential overall capacity of more than 11 GW are currently ongoing in 29 African countries.The expansion of conventional power plant capacities is struggling to keep up with the rapidly growing demand for energy in Africa and, in particular, South Africa. This means that in addition to being on the political agenda, the increased generation of renewable energy is essential to the energy industry and is set to continue.
Tata power’s Mundra UMPP generated 62,945.77 MUs of electricity India’s first mega power plant, the 4000 MW Coastal Gujarat Power Limited (CGPL) has successfully completed three years of operation, generating 62945.11 MUs of electricity from 2012-15. Using supercritical technology, and one of the most energyefficient thermal power plant in the country, the Mundra UMPP supplies electricity to 8 discoms in 5 states, namely Gujarat, Rajasthan, Maharashtra, Haryana and Punjab. Gujarat is the largest procurer of power from CGPL at 47.5%, followed by Maharashtra at 20%, Punjab at 12.5%, and Haryana and Rajasthan at 10% each.The Mundra UMPP meets 2% of India's power needs and benefits close to 16 million domestic consumers, apart from supplying cost competitive power to industry and agriculture. In Gujarat, the project supplies power to Gujarat Urja Vikas Nigam Limited, in Maharashtra to Maharashtra State Electricity Distribution Company Ltd, and in Punjab to Punjab State Power Corporation Ltd. The project powers 2 discoms in Haryana- Uttar Haryana BijliVitran Nigam and Dakshin Haryana BijliVitran Nigam Ltd, and 3 discoms in Rajasthan- Ajmer VidyutVitran Nigam Ltd., Jaipur VidyutVitran Nigam Ltd and Jodhpur VidyutVitran Nigam Ltd.
18 u EPC World u August - 2015
News
Construction award
Geoprenuer emerging developer, Deputy Rohan young achiever Rohan Agarwal, Deputy Chairman of Geopreneur Group was awarded the young achiever’s award by Pranay Vakil, Chairman of Praron Consultancy at the National Awards for Real Estate and Infrastructure 2015 in Mumbai. The group also bagged the emerging developer of the year award. The company is a three year old startup and aims at creating bespoke projects for their consumers. The company has two projects on the verge of completion and few more projects in the pipeline. One of the two, namely Mayur has already bagged the 6th estate award for the best redevelopment project award. Agarwal commented on the achievement and said that they are honoured to be bestowed with the awards. He said that it is adding to their growing list of acknowledgements and setting them as a fierce entity in the field. He felt honored after receiving the award and also congratulated the entire team of Geoprenuer.
Mining news Vedanta looks to restart Goa mines by October Vedanta Ltd is expected to restart iron ore mining by October in top exporting Goa province and that talks were continuing with regulators for merging with unit Cairn India. The group which has been hit by a slump in crude prices and mining bans in key producing states, also posted a net profit of 8.66 billion ` ($135.61 million) for its fiscal first quarter to June 30. CEO Tom Albanese said on a conference call Vedanta was hoping to get approvals as early as next month to restart a few mines in Goa and was positioned to restart mining at a rate of 5.5 million tonnes a year.
Energy award Hitesh Doshi receives renewable energy leader of the year award
Aviation Partnership
World CSR Congress has recognised Waaree Energies Limited’s Chairman and Managing Director Mr Hitesh Doshi as the renewable energy leader of the year.The award was presented at a recently held event in TajLands’ End, Mumbai on 24th July. A company commented that Doshi established the company with a vision to promote solar energy. He wanted to bring affordable solar solutions to developed and emerging markets, especially India.
Shipping investment BPCL buys first shipment of Russian Far East crude grade Indian refiner Bharat Petroleum Corp Ltd (BPCL) is set to import a rare cargo of Sokol crude from Russia’s Far East as it takes advantage of a regional glut to secure cheaper oil. BPCL bought 1 million barrels of Sokol from Statoil ASA, traders said. It was BPCL’s first purchase of the Russian crude grade, according to an industry source with direct knowledge the matter. The oil is due to load in September in South Korea, where Statoil has kept the crude in storage for several months, the traders said.The source said it looks like there is plenty of crude in the market and that’s the reason Statoil offered the Sokol grade at such a competitive price.The high-quality sweet Sokol grade usually goes to refiners in nearby South Korea and Japan. More Russian crude could be shipped to India after state-run Rosneft this month finalised a deal to supply 200,000 barrels per day of oil to Essar Oil Ltd, India’s second biggest private refiner.
AirAsia India and Air Costa ties up with SITA Air transport communications and information technology specialist SITA will provide its aircraft communications and flight tracking technology to domestic carriers Air Asia India and Air Costa. Under the tie-up, the deployment of the two technologies would help these airlines track flights in real time throughout their entire route network and streamline operations. Aircraft tracking is a mandatory requirement for all domestic carriers. Besides, the two airlines would also deploy SITA’s other solutions such as AIRCOM Server Online and AIRCOM datalink services, which interface with the airlines’ operations, crew management flight planning and maintenance software. With real-time weather data going directly to the pilots and live messaging between the flight crew and the airline operational control, flights are more efficient and turnaround times are reduced. SITA OnAir solution enable airlines to personalize the passenger experience, streamline cabin and cockpit operations, and optimize maintenance procedures. The Indian aviation market is estimated to grow by 10 per cent every year for the next ten years.
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LIGHT
Worries
In the backdrop of trickling power purchase agreements with state utilities, power owners face a behemoth task of selling the untied capacity in the short-term markets. It is also because State electricity distribution utilities are already in distressed state. Power industry is still heavily debt ridden. 46,000 mw power projects facing viability issues while ` 75,000 crore loans at risk if issues aren’t sorted out soon. EPC World takes a round up. 22 u EPC World u August - 2015
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T
here was lot of enthusiasm among the industry players when the NDA-led government took over the ruling power but after more than a year now the optimism seems to be fizzled out. And, the most hit sector was power as 46,000 mw of power projects are facing viability issues due to lack of long-term buyers for electricity, inadequate fuel supply, and aggressive bidding to win projects and coal blocks. According to a latest report released by CRISIL, of this 46,000 mw, 36,000 mw, are coal-based projects within which tariff under-recovery has impacted 20,000 mw of capacities, while the rest are reeling because of inadequate feedstock and poor electricity off take by discoms. And 10,000 mw of gasbased projects have become unviable because of dwindling fuel supplies from the Krishna-Godavari basin. “Total loans to these stressed generation projects are currently about ` 2.1 lakh crore. A sixth of it, or about ` 35,000 crore, is for projects which have the cushion of a strong parent. Additionally, projects with loans of ` 1 lakh crore could become viable if their payment profiles can be structured appropriately. This leaves the remaining ` 75,000 crore of loans at risk,” says Pawan Agrawal, Chief Analytical Officer, CRISIL Ratings. Another ` 1.9 lakh crore of debt is owed by weak discoms for which moratorium on principal repayment – based on a financial restructuring package (FRP) announced in 2012 -ends in the current and next fiscal. Till date, government support has prevented these discoms from turning weak. Assurance of continuing financial support is necessary else this debt, too, can be at risk. After the FRP, states and discoms did not follow through fully with measures to improve financial discipline and commercial orientation. The FRP, thus, provided only a liquidity respite. Discoms will continue to face liquidity pressure till there are appropriate tariff hikes and a significant reduction in aggregate technical and commercial
(AT&C) losses from the current level of 25.4%. CRISIL believes, significant efforts to augment domestic coal production and improvement, in the ability of discoms to sign long-term PPAs are critical going forward. While the government has taken some positive steps to improve fuel availability through coal block auctions and gas subsidy, these provide only limited relief and the plant load factor of capacities commissioned after fiscal 2009 will remain suboptimal at 45%. And if discoms remain financially fragile and stay away
Private sector capacities without PPAs are increasing
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Fixed-cost under-recovery will continue even if compensatory tariff is awarded
Hard fact
from signing power purchase agreements (PPAs), capacities at risk will increase. Says Sudip Sural, Senior Director, CRISIL Ratings: “Annual tariff hikes of 10% over the next three years and a reduction of at least 200 basis points in AT&C losses are necessary for discoms to break even in the medium term. As for sector health, improving agricultural metering and feeder separation, timely tariff filings and financial reporting, focus on power purchase cost optimisation through accurate demand estimation, and signing more PPAs are necessary.” It is pertinent to note that provisions on timely tariff filing and pass-through of fuel and power purchase costs are a part of the amendments proposed in the Central Electricity Act, but success here depends entirely on implementation by state governments. And paving the path for privatization through distribution franchisees and evolving the open-access mechanism would induce efficiencies.
Huge latent demand is yet to be served
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It is well understood that the ebbing performance of India’s power sector, unless reversed, will trip India’s financial system. Specifically, we had warned generating companies would face an existential crisis because of fuel shortage. We also advocated proactive policy measures to reform the distribution sector such as making available dependable financial information, meaningful and regular tariff hikes, and concerted reduction in aggregate technical & commercial (AT&C) losses. The government notified a financial restructuring package (FRP) for distribution companies, or discoms, wherein their shortterm debt was converted to long-term loans backed by state government guarantee. The FRP also envisaged regular tariff hikes and reduction in AT&C losses. But while tariff hikes were high in the first two years following the FRP, things have fizzled out since then. And on the AT&C front, there has been hardly any progress.
How a vicious cycle got set off • Because discoms remain financially fragile, they are chary of committing to long-term power purchase agreements • Lower power purchases by discoms, and inadequate coal and gas supplies, are leading to suboptimal plant load factors at generating companies, especially the new projects • Further, tariff aggression shown during competitive bidding to bag projects has meant poor cash flows, which is cramping the ability of generating companies to service debt in spite of the cost of imported coal declining • Weak generating companies with no long-term PPAs defeats one of the objectives of FRP, which is to progressively reduce
Trend in discom losses
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short-term power purchases by state discoms. The government has proactively provided mitigants such as the e-auction to reallot coal blocks and allocation of imported regassified liquefied natural gas, which have improved fuel supplies. But this was offset by the tariff aggression seen during the coal block auctions. Clearly, private developers haven’t heeded the hard lessons of the past. The upshot of all this is that if state governments do not provide support to discoms in repaying debt, nonperforming assets (NPAs) in the banking system will surge. While the Reserve Bank of India’s 5/25 scheme can provide some respite to the generation sector, viability issues of some projects can crank up NPAs. It is said that static is hazardous to those living close to power lines. While the jury is out on whether this is for causal or coincidental reasons, analogically, it describes aptly the static cling that lenders and promoters of power projects find themselves in today.
Looming uncertainty The power plants commissioned since April 2014 with capacity of 13,900MW face financial uncertainties due to the lack of sufficient off-take agreements and transmission constraints, says India Ratings and Research (Ind-Ra). Ind-Ra estimates the annual capacity charge losses could be as high as INR51bn (excluding return on equity) for these plants. Capacity charges could be partially recovered, if power is produced by these plants and sold in the power exchanges or through merchant power sale. Low prices of imported coal may allow these plants to be reasonably competitive at the generation cost (excluding return on equity) of about INR3.6/unit and if they are located near the coastal region. However, stranded generation from these plants for a year may be as high as 37 billion units (BU) compared with
The stress matrix
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Bank and financial institution exposure to power generation projects
the total traded short-term volume of about 99BU in FY15. India’s total coal-based power plant capacity was 167,207MW at end-June 2015 and 8.3% (13,900MW) of the total capacity was added from April 2014-June 2015. Of the newly commissioned plants, the capacity of 40% of the plants is under strain and 37BU of generation may be foregone annually, unless sold through short-term markets. While 70% of the power is tied up through long-term/medium-term offtake agreements, about 1,300MW of the tied-up power encounters transmission constraints. Transmission constraint means that electricity cannot be transmitted from the location where it is generated to the location where the demand exists. The weighted average price of electricity transacted through power exchanges is INR2.5/unit and INR2.35/unit in Power Exchange India Limited and Indian Energy Exchange, respectively (CERC, May 2015). Any further protraction of the subdued short-term rates could exacerbate these losses. Ailing finances, expectation of a high bid price (based on case 1 bidding pattern) and prevailing short-term tariffs preclude many state utilities from cobbling long-term contracts. With over 5,500MW of capacity lined up for commissioning in FY16, there is increased uncertainty of timely debt service for these projects in the absence of a strong off-take agreements/evacuation capacity. The power demand and supply situation is constrained by the lack of adequate inter-regional transmission capacity. Consequently, surplus power from the eastern and the western regions is unable to cater to the demands of the northern and southern regions. The seemingly lower power deficit position, contributed partly by load shedding, although could be short term, intensifies the stress on operating environment for these projects. Despite riding over the difficult construction period including overcoming land issues and delayed fund injections, the power projects are struggling to transition into the next stage of the project life cycle. In the backdrop of trickling power purchase agreements with state utilities, power owners face a behemoth task of selling the untied capacity in the short-term markets. Historical power trading volumes highlight a gradual increase in power sales through short-term transactions. Short-term trade 30 u EPC World u August - 2015
volumes had increased to 10.87% of the electricity generated in FY14 from 8.63% in FY10. However, the total traded shortterm volume dipped to about 99BU in FY15 from 104.64BU. Ind-Ra expects an addition of minimum 11% to the short-term energy market in FY16 from these commissioned power plants, if the plant owners decide to generate power. This growth is reminiscent to the pre-FY13 rate. Hence, the volume of shortterm trade would inch up beyond 12% of the total power generated. Given the surplus capacity hitting the short-term market, the spot market rates could slide further down. Increased focus on the transmission sector rather than award of projects through competitive bidding for inter-state infrastructure could have some salutary effect on the power sector. Additionally, the power sector will stabilise over the longer term. We believe the consolidation in the sector will continue.
Discoms gasping for liquidity Distribution continues to be the weakest link in India’s power sector value chain. Riddled with high losses and debt – stemming from tariffs not reflecting costs, and high transmission losses – the sector has often needed a lifeline. These include the financial restructuring package (FRP) announced on October 5, 2012, and implemented in fiscal 2013, and a one-time settlement done as per the Ahluwalia Committee recommendations in 2001. Under FRP, short-term liabilities of discoms with weak credit profiles were restructured with sponsor states taking over half of them through state-guaranteed bonds in a phased manner. The remaining 50%was converted into long-term loans guaranteed by the state governments with a moratorium on principal repayment for three years. This provided much-needed liquidity relief, but losses in FRP states did not reduce by the end of their moratorium period, because of continuing aggregate technical and commercial (AT&C) losses and insufficient tariff hikes. CRISIL, therefore, believes discoms will face liquidity pressure in the medium term. Given the situation, we analysed the performance of discoms with weak credit profiles. We have also presented the ability of state governments to support discoms with weaker credit profiles.
• For Rajasthan discoms, subsidised power to agriculture (share of agriculture in power consumption is 40%) and delayed subsidy receipts from the government led to poor financials. After nil tariff hikes for 6 years, Rajasthan went for successive ones between fiscals 2012 and 2015 – albeit a delayed one in 2015. Despite this, power procurement costs and AT&C were elevated, leading to high gap/ unit. With the moratorium ending this year, these discoms are facing liquidity pressure and hence have approached banks to recast loans in June 2015. • Tamil Nadu, an early adopter of FRP, went for a 37% tariff hike in fiscal 2013, but here, too, subsequent hikes declined. While AT&C losses are low, loss recognition is based on estimated agri consumption, which is unmetered. Apart from the possibility of being non-reflective of actual technical losses, the estimation of agri consumption also leads lower agricultural subsidy estimations and hence a higher gap. (Agriculture constituted 20% of consumption and 0% of revenues). Given the high cross subsidisation in state (average realisation from domestic consumers was at ` 2.5/unit compared with overall realisation of ` 4.85/unit in fiscal 2013), efficiency improvements and optimising of power purchase cost are necessary to bring down losses. • The undivided Andhra Pradesh was a late adopter of FRP, doing so in fiscal 2014. As part of FRP, discoms there recognised prior subsidy receivables from the government as unrecoverable losses, leading to write-offs, which reduced the gap per unit in fiscal 2015. Although the state has better operating efficiencies, high power purchase cost has been the nemesis for its discoms. And in thecurrent fiscal, the tariff hike was meagre at 4-5% in both Andhra and Telangana, which means the gap/unit will remain static. • Haryana did undertake consistent tariff hikes after fiscal 2011. While this was encouraging, its discom’s operating efficiency worsened. AT&C losses increased to 36.26% in fiscal 2014 from 32.5% in 2013. With moratorium on FRP loans ending, the discom is expected to face liquidity pressure. Further improvement in gap/unit needs to be driven by sharper reduction in AT&C losses. • Uttar Pradesh, with significantly weak collection efficiency (78% compared with the all-India average of 94% in fiscal 2013) has seen high AT&C losses. Its commercial losses constituted almost 37% of AT&C losses due to rampant power theft. The state has undertaken tariff hikes consistently in recent past, but its gap/unit is estimated to have remained high due to AT&C losses.
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Risk clustering of states
Source: CRISIL Ratings Underlined states undertook FRP
Mounting losses and debt drove discoms to FRP Losses and debt increased sharply for discoms because of insufficient tariff hikes, high AT&C losses and low subsidy collections from state governments (Chart 1). This severely impacted their ability to service debt, and cascaded into crimped cash flows for generating companies. The accumulated losses of discoms were at ` 2.5 lakh crore as March 31, 2013, and these were largely funded by borrowings. To delineate their credit profiles, CRISIL classified discoms based on the key parameters impacting their debt servicing ability, such as gap/unit, AT&C losses and resultant debt levels. We found discoms of six states -- Karnataka, Chhattisgarh, Maharashtra, Gujarat, Himachal Pradesh and Kerala -- in the low-risk quadrant with low gap/unit and AT&C losses. Discoms of Odisha and West Bengal had moderate risk due to high AT&C losses despite near-nil gap/unit. On the other hand, discoms of 10 states were classified as high risk in Cluster III and Cluster IV due to yawning gap/unit and AT&C losses, which translated into soaring debt levels. Discoms of eight of these states – in Andhra Pradesh (including Telangana), Bihar, Haryana, Jharkhand, Rajasthan, Tamil Nadu and Uttar Pradesh -- were restructured under the FRP programme. These states constituted 70% of the total discom borrowings as on March 31, 2013. 32 u EPC World u August - 2015
FRP’s objective of gap elimination would be difficult to achieve given the current pace of tariff hikes and AT&C loss reduction Although discom losses are estimated to have flattened out in fiscal 2015, the objective of gap elimination under FRP hasn’t been met. Hence, despite lowering of interest costs under FRP and optimism about power purchase costs, we expect the financial position of weak discoms to deteriorate in the medium term because of fewer tariff hikes and inadequate
reduction in AT&C losses. Our analysis is further ratified by a closer look at some of the large FRP states such as Andhra Pradesh, Haryana, Rajasthan, Tamil Nadu and Uttar Pradesh. At an aggregate level, we expect discom debt to keep rising so as to fund accumulated losses and planned capex CRISIL estimates that as much as ` 75,000 crore of loans – or nearly 15% of aggregated debt to power generation companies -- are at risk of becoming delinquent in the medium term. Further, close to ` 1.9 lakh crore of loans to six weak discoms, wherein the moratorium under the financial restructuring package (FRP) is ending in the next 18 months, are also at risk if timely support is not extended by the central or state governments. Consequently, loans to power sector will moderate in the medium term Lending growth in the power sector, which had hit a high of 34% in fiscal 2011, more than halved to 16% in fiscal 2015. CRISIL expects this trend to continue given lower incremental sanctions in the last two years and fewer commissioning of capacities expected in future. Also, with risks rising, banks and financial institutions (FIs) are turning more cautious. CRISIL foresees credit growth to the power sector declining further to around 14% in the period till March 31, 2018. Yet the
share of the power sector in total bank credit will remain high at around 9% till then. Outstanding loans of banks and FIs to this sector are expected to reach around ` 16 lakh crore. Of this, around ` 9.5 lakh crore would be for generation projects.
` 2.1 lakh crore debt at risk in generation
in distress today. Loans to these projects are around ` 2.1 lakh crore, with about two-thirds lent by public sector banks. CRISIL has classified coal-based projects (76% of the ` 2.1 lakh crore exposure) into three buckets of risk -- offtake, fuel availability, and aggressive bidding. The risk is highest where lenders are exposed to projects that were bid so aggressively that there is a question mark over their viability. Gas-based projects (24% of the exposure), on the other hand, are weak due to lack of fuel availability.
The way forward In CRISIL’s opinion, the following can be done to address the woes of the sector: • Focus on augmenting domestic coal production: Domestic coal supplies to the power sector increased 10.7% in fiscal 2015, driven by speedier environmental clearances and land acquisition, leading to higher coal production. The government is also taking critical steps such as expediting the construction of three critical railway lines (Tori-ShivpuriKathotia in Jharkhand, BhupdeopurKorichhaapa to Mand Raigadh mines in Chhattisgarh and Barpali-Jharsuguda in Ib Valley, Odisha). CRISIL believes that continued and concerted efforts in this regard are necessary to address fuel availability issues. Rake availability also needs to improve in line with increasing production. • Quick resolution of compensatory tariff issue: The matter of compensatory tariff is pending with APTEL. A faster resolution will help reduce under-recoveries for the aggressively bid-out projects using imported coal. • Flexible structuring under 5/25 scheme: Flexible structuring of loans of under the 5/25 scheme with a moratorium of 2-3 years can provide respite to stressed power projects and ease the pressure on cash flows. • Reforms in distribution needed to restore PPA bidding: Discoms continue to be the weakest link in the power value chain due to their precarious financial health. This risk has historically manifested through delayed payments to generators. However, in the recent past it has also started to manifest in the form of lower energy demand and therefore a reluctance to commit to long-term PPAs. This has spawned a new risk for the generating companies: exposure to the vagaries of the short-term electricity market, which, in turn, leads to low PLFs. CRISIL believes structural reforms are critical to improve the financial health of the distribution sector. We discuss this in the next article. (The graphs and data in this report are sourced from CRISIL Ratings, Central Electricity Authority, CERC, Forum of
CRISIL estimates around 46,000 mw of power generation projects (36,000 mw coal-based and 10,000 mw gas-based) are www.epcworld.in
Regulators, and Power Finance Corporation’s report titled ‘The Performance of State Power Utilities)
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Power
Industries & Commercial Entities: Can they benefit from solar pv
S
olar Photovoltaic (PV) is the single greatest topic of interest for structural engineers and consultants who are designing large rooftop spaces for their clients. To be able to add value to roofs and make them ‘power producers’ is something being considered for most new projects around the nation. What has caused this turnaround from a few years ago when Solar PV was quite alien to India? Are Solar PV Rooftops really beneficial? We will try to delve into these questions over the next few pages.
in power tariffs for Commercial Entities over the last 10 years. The state of Maharashtra has highest non domestic power tariff rates at `10.90/unit during 2013 followed by Andhra Pradesh `9/unit, Kerala `8.50/unit, West Bengal `8/unit & Karnataka `7.70 /unit. Obviously, the above mentioned rates vary on locations and industry types within the states. However, it is noticed that most industrial and commercial consumers now pay ` 7.2/unit or higher. Solar PV beats the above power tariffs be as much as 30%.
POWER TARIFF SCENARIO
ECONOMICS FOR SOLAR PV ROOF TOPS
Industrial/Commercial entities pay more than ` 7/unit for their electricity consumption. The below table shows the trend
Looking at the above power tariffs, and taking the case of a 100kW(DC) Solar PV Rooftop, we find that the system produces power at less than ` 5 per unit even without subsidies.
Trends in Power Traffs for Commercial Customers (`/unit)
Assumptions
Value
Kw Capacity (DC)
100
Current Power Tariff
7.2
No. of Working Days
340
Degradation Factor
1.00%
Average Daily Generation/Kw
4.5
Operating Expense/Kw/Year
600
Fig. Graph displaying the escallation in power rates in India
Interest on Investment
0.12
SOURCE: CERC TRAIFF RATE
Escalation in Power Grid Tariff YoY
2%
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Analysis
State
Source: Electricity Regulatory Commission of various states during 2014
Principal Amount (after reducing tax savings)
51,52,000
Interest on Loans
65,19,148
Operating Expenses (600 per Kw per year for 25 Years)
15,00,000
Total Power Generation over life
33,99,333
Replacement of inverters over life of plant (2 instances)
20,00,000
LCOE*= (Principal Amount+ Interest+ Operating 5.0 Expense+Replacement of Inverters)/ Total Power Generation
BENEFITS OF SOLAR PV ROOFTOPS Solar PV Rooftops have the following benefits over conventional power sources: • A Solar PV Plant is the greatest insurance against rising power tariff. It produces power over its life at less than ` 5/ unit. • Diesel Cost & Electricity are increasing YoY. • Solar PV Plant can certainly reduce power bills by up to 70% (for day-based units). • Solar PV Plant produces stable power consumption through the day. • Solar PV Diesel Hybrid Power Plant leads tohuge savings against diesel. • Acceleration Depreciation benefit under Section 80 IA sub-section 4 (Income Tax) extended for projects executed & commissioned. • Good IRR’s and ROI = between 15% - 23% ( factor dependant) • Hedge against future Renewable Purchase www.epcworld.in
Obligations (RPO’s) • Solar PV Plants are virtually maintenance free. • Solar Plant can generate electricity for 25 years. • Insulation from heat and lower cooling costs.
CONCLUSION
It has been long assumed that solar energy is a costly alternative to conventional energy. The advantage of solar energy is that it is the most stable energy source for India for decentralized applications. Industries and Commercial Entities will have to think of Solar PV Rooftops as it is the best insurance against rising power tariffs. The viability of the same even without subsidies is proven now. Contributed by: Shashwat Cleantech Pvt Ltd
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PEBs
I
t has been estimated that construction market in India is approximately ` 250,000 crore. In contrast PEB market is around ` 5,000 crore. This clearly tells the penetration of PEB in construction sector. However, the scenario is fast changing. In the last few years, PEB has consolidated its position and widely used in industrial and warehousing applications. Industrial applications have traditionally been the largest market for PEB’s. This trend continues even today. Since the relationship between PEB’s 36 u EPC World u August - 2015
and Industrial growth is close, the two tend to reflect symbiotic behaviour. After a dull period over the last several months, industrial growth seems to be picking up. This fares well for PEB’s, and demand is expected to grow significantly in the coming months. Drawing overwhelming response from construction and infrastructure builders, due to heightened construction activities currently going on across the country, the global players in the PEB industry have not just set up their shops but also launched multi-prong brand building initiatives
Feature
PEBs Gaining momentum PEBs due to its distinctive characteristics, can prove to be a good option for speedy and affordable construction in urban as well as rural areas. PEB buildings are environment friendly and offer design flexibility, low maintenance and ease of construction. So, it can emerge as a preferred mass market low-cost housing option as well.
by holding technical seminars, exhibitions and events displaying their products to popularize the benefits of PEB brands. In the process, they have been able to create awareness informing people that under the PEB systems buildings are built keeping the eco-friendly environs, aesthetic value, designing, durability, energy efficiency, cost effectiveness and speedy completion of the construction projects in mind. There has been significant growth in India in PEB market from 2003 and it has grown at 25 per cent to 30per cent till www.epcworld.in
2008 and the growth slowed down after 2008. Now again the positive sentiment has come after the new government is formed at the center. There is hardly any difference between the products offered in India and in the developed world. Design practices are similar. Design codes and building codes are comparable. Material specifications are alike. Fabrication and erection tolerances are compatible. The difference is in the channels to market, and the extent to which PEB’s have penetrated 37
PEBs
construction applications. Compared to the developed world, PEB’s are still relatively new in India. As a result, their awareness and acceptance is not the same. However, the Indian market is appreciating the benefits offered by PEB’s like faster construction and lower cost, and is steadily moving away from conventional practices. A closer look says that in the developed countries PEB concept has been used from 1970’s onwards where as in India it came in 2000. From 2003 onwards, there has been acceptability in India among consultants, EPC companies, Institutional customers, logistics companies etc in view of the advantages of PEB concept. In developed countries the per capita consumption of steel is 250 to 300 KGS whereas it is about 50 KGS in India. Institutions like INSDAG are doing lot of spade work to promote usage of steel in view of distinct advantages compared to concrete. It is important to note here that penetration of PEB in large traditional segments like power, chemicals, cements etc is increasing. Interestingly, small scale industries have also started realizing the advantages of using PEB over conventional concrete buildings. With rapid awareness, PEB concept is not limited to industrial and warehousing areas. Today PEB application ranges from cold storages, retail chains to metro rail stations. According to Knight Frank report, India total warehousing space requirement in India expected to grow at a CAGR of 9 per cent from 919 mn sq ft in 2014 to 1,439 mn sq ft by 2019. This is because, the Indian warehousing sector is progressively getting redefined from the traditional concept of ‘Godowns’ to modern day set ups with automation. Today, warehousing has become one of the major segments contributing to a rapidly growing Indian logistics industry. Rapid growth in international trade and rise in containerization levels have led to high demand for warehouses and a tremendous opportunity for the private sector. The demand for logistics services in India has been largely driven by the remarkable growth of the 38 u EPC World u August - 2015
economy. To support India’s fast paced economy, growth of logistics industry is very essential. It is estimated that the Indian logistics sector will continue to show healthy growth annually, leading the pace of growth of the economy at large. This growth is expected to gain greater momentum due to the exponential growth of the Indian economy. India is also experiencing a big retail boom as the buying capacity of the middle and upper middle segment of the population has scaled new heights. Smart logistics companies see technology as a way to continually increase productivity and operating efficiency. This is certainly a good news for PEB as warehouse is an important segment for the PEB sector. It has been observed, historically, Indian companies have considered warehousing activity as an unavoidable cost and the objective has always been to reduce this cost as much as possible. Such an attitude has resulted in huge under-investment in the sector. However, increasing competition and introduction of global best practices by multinational companies are compelling Indian businesses to rethink on the importance of warehousing activity and the resultant benefits of managing an efficient supply chain.
Breaking the barrier The industry has moved from basic applications such as warehouses, petrol stations, factories, workshops, etc. constructed in early 3-4 years of last decade to highly complex buildings such as shipyards, complex factory buildings, offices, etc. in last 7-8 years to power plants, steel plants, oil & gas structures, factory buildings with 500 MT cranes and high rise structures – commercial and residential and so on which require very specialized design, manufacturing and installation skill sets. Steel as a construction material for high rises is being accepted at a very slow pace by customers as the building
PEBs
segment is still dominated by concrete. The industry has witnessed change in adaptation of steel in high rises both commercial and residential segments over the last 5-6 years mainly because of various advantages it offers such as off-site construction, speed, quality, timely completion, etc. This will take substantial amount of time and extensive promotion by PEB players to take to a certain stage. In the changing scenario, pre-engineered buildings play a vital role as far as development in India is concerned. The union budget and government main focus is to accelerate pace of infrastructure development in the country with ` 70,000 Cr been allocated, tax free bonds for rail, roads & irrigation project along with pushing PPP model for infrastructure development by the Government. It has been observed that RCC and other conventional constructions take longer time for any project to complete. Pre-engineered construction can address the issue (longer time in construction) in a significant way. People associated in the industry say that Pre-Engineered construction plays a vital role by saving time by up to 40% in comparison to RCC and other conventional construction. Most significant change in this direction is that the Indian market has now accepted Pre Engineered Buildings as a favourable alternative construction methodology especially when factors like quality, safety and time come into consideration. The market has now evolved and is ready to introduce PEBs in various new applications like Multi-Storey buildings, hospitals, bridge girders, airport terminal buildings etc. People associated with the industry says that the Indian PEB market is now experiencing a demand shift to new applications due to infrastructure development in the country like airports, multistory buildings, stadiums, metro stations etc. There is undoubtedly, a very promising future for this sector in the coming years. Apart from this, PEBs due to its distinctive characteristics, can prove to be a good option for speedy and affordable construction in urban as well as rural areas. PEB 40 u EPC World u August - 2015
buildings are environment friendly and offer design flexibility, low maintenance and ease of construction. So, it can emerge as a preferred mass market low-cost housing option as well.
The Challenges Everything is not smooth for PEBs there lies challenges as well. However, the challenge is totally different from other sectors. The greatest of all challenges in this sector lies in to get a perception shift. Though it’s changing, but the change is gradual. People still tend to look at the conventional methods of construction as the cheaper and best method, completely overlooking the speed and long term benefits of metal construction. Other challenges, however, can be the maintenance of larger than life steel structures. The other challenges are, general market slowdown, increase in input costs and high interest rates, lack of support from Government in infrastructure growth, slowness in auto segment etc are affecting the industry to some extent. Drawing overwhelming response from construction and infrastructure builders, due to heightened construction activities currently going on across the country, the global players in the PEB industry have not just set up their shops but also launched multi-prong brand building initiatives by holding technical seminars, exhibitions and events displaying their products to popularize the benefits of PEB brands. In the process, they have been able to create awareness informing people that under the PEB systems buildings are built keeping the eco-friendly environs, aesthetic value, designing, durability, energy efficiency, cost effectiveness and speedy completion of the construction projects in mind. It is imperative for PEBs manufacturers to respond suitably by improving not just their own capability, but that of their suppliers and builder partners as well. The need of the hour is setting new benchmarks of excellence through innovations in PEB process and technology
PEBS
The present Government is focusing on affordable housing in big way. What could be PEBs role in this direction? Do you think PEBs can emerge as a preferred mass market low-cost housing option? It is interesting to note that housing construction spaces in India are slowly shifting to higher levels of premanufactured or pre-fabricated building systems that offer customized solutions. Everything from doors, windows to floors and fit out is preferred pre-manufactured. Preengineered light weight houses are synonymous with sustainable low-cost housing conforming to the demand for aesthetics, high quality, fast construction and cost effectiveness. We as Interarch specialize in preengineered steel systems that cater home segment. These pre-engineered systems of light weight wall frames
We have seen a significant shift of industrial construction towards pre-engineered construction, the same shift will happen for Infra and commercial projects in future for projects like stadiums, multi storey buildings, airports, shopping malls and many more. GAUTAM SURI, CTO & Founder Director , Interarch.
“The upcoming GST will be a big game changer” Sectors such as automotive, power, logistics, Pharma, FMCG, and retail provide huge growth opportunity for PEB in India says GAUTAM SURI, CTO & Founder Director, Interarch, in an interaction with EPC World… allow architects and end users to design and build homes up to G+4 in light steel. What policy related support you want from the Government? Do you think there is a need to classify PEBs as a separate industry? The upcoming GST will be a big game changer for a company like Interarch as we will be more competitive viz-a-viz the unorganized sector players. 42 u EPC World u August - 2015
The greatest of all challenges in this sector lies in to get a perception shift. What is Interarch’s move to bring more people in metal construction? Pre-engineered buildings have proven to be way safer, stable, fire resistant, energy efficient, less time consuming. So for such obvious benefits, it has made its position stronger in the industry and has gained the mind share as well. We are confident just how the past decade we have seen a significant shift of
industrial construction towards pre-engineered construction, the same shift will happen for Infra and commercial projects in future for projects like stadiums, multi storey buildings, airports, shopping malls and many more . We, at Interarch, have even set up a separate division which releases a monthly newsletter and e-mailer educating readers about the benefits and advantages and other possible in steel. To educate the industry further Interarch launched Building Innovators forum in 2012 for knowledge leaders and innovators of the steel buildings community in India. Since then Interarch has executed several mind share events in various cities across India. Interarch Building Innovators partners with the leading industrial and business minds of India and, industry renowned Architects and Consultants, continually supporting modern pre-engineered steel construction aims to bring together the best minds. Interarch building
Interview
Innovators extends its interaction through Interarch “Young Builder Program” Young Builder Program gives an insight and educates Young Architects & Engineers about the Indian Pre-Engineered Steel Industry, various applications & nomenclature of Metal buildings. Interarch has conducted seminars and knowledge sessions in various educational institutes across India like School of Planning & Architecture, Jamia Millia Islamia, K.R Mangalam Institute, Vastukala Institute, Nirma University & Anant Institute of Architecture in Ahmedabad, Rajasthan Institute of Engineering & Technology in Jaipur and B.K.P.S College of Architecture, Pune. What have been the current trends in the PEB market? Which industrial segments would you consider as your growth drivers? The journey of PEB in India is remarkable in such a short span of time. Sectors such as automotive, power, logistics, Pharma, FMCG, and retail provide huge growth opportunity for PEB in India. Though, it is said that the PEB industry is still in its infancy www.epcworld.in
but, over the last six years there has been a growth in this sector due to increasing awareness amongst consultants and customers. It would certainly not be an exaggeration if we say the industry is catching-up very rapidly. In fact, pre-engineered building sector has started getting its due credit as a favorable alternative construction methodology in India today. There is undoubtedly, a very promising future for this sector in the coming years. We feel that in upcoming months industrial segments like Automotive, Cement, and Engineering& Manufacturing would drive growth Could you tell us about some of your recent projects? We have had some breakthrough. Besides our normal pre-engineered buildings work, we have done warehousing, some complex industrial buildings, also some heavy buildings for SMS Siemag. We are executing largest clear span structures – 100 meter span for Ultratech cement. Recently Interarch has won a project from Fortis hospital to construct a G+7 storey hospital buildings in Bangalore and construction of a G+9
storey ramp structure for a hospital in Chennai. Last year Interarch had completed G+6 Multi-Storey building for Hindustan Unilever limited and G+10 structure for CP India in Pune What is your vision for Interarch 2020? We are quite upbeat about the growth of construction sector in the coming year. Stemming from the Pre-engineered buildings industry, what is taking shape is the new Heavy Engineering and larger Infrastructure projects which is the next in line for the infrastructural development of the country. Projects like Airports, International terminals, power plants, ports etc. require heavy steel structures and a different approach in comparison to Pre-engineered buildings. We are focusing to educate and convert these applications into pre-Engineered structural steel jobs. Heavy Steel Structure and large infrastructure projects hold nearly a 20% share of the infrastructure work that is taking place in our country currently. We are aiming to achieve a strong foot hold in this market. 43
Interview
PEBS
“PEB market is likely to grow at much higher pace” PEB can be made even more affordable by value engineering in terms of design, says Priyank Patel, Director, ALPHA NIPPON Innovatives Ltd in an interaction with EPC World The market of India is cost sensitive and the initial higher cost barrier is one of the reasons for lower uptake of prefab technology. Do you think PEB construction can be made more affordable? Affordability is a relative term. PEB will be cheaper when we take into account the early Return on Investment because of faster completion of PEB as compared to RCC. Currently prefab structures are less priced because of recent trend of drop in steel prices. PEB is a volume based business. When the volume of project is large, the economy of scale works and gives a cheaper production rate. This leads to a more affordable rates. PEB can be made even more affordable by value engineering in terms of Design. Design optimization will lead to less consumption of steel and ultimately reduce the PEB cost. We use Corrugated beam technology (sinusoidal web) which is much beneficial to bring down the cost of PEB when the clear span of the building is more than 30m. In our case, robotic welding and “No scrap” concept gives a fast production and again helps in bringing down production cost. The new Government is putting lot of emphasis on infrastructure projects. Against this backdrop, how do you visualize industrial PEB market in India? 44 u EPC World u August - 2015
We anticipate that PEB market is likely to grow at much higher pace. Currently also we see that there is surge in number of inquiries having large size PEB projects. All levels of PEB companies whether small or large, are able to get sufficient business today if they are ready to meet deadlines. We feel that Government giving clearance to infrastructure projects gives business opportunity to all levels of PEB companies. Large PEB companies which are overloaded now a days sublet their work to small players. PEBs market in India is now experiencing a demand shift to new applications like airport, metro station etc. What it means for PEBs market? What are your latest value additions in this? Not all PEB companies intend to work for applications like Airport, metro etc. Such projects require key resources starting from design, detailing, production of special members, etc. which cannot be catered by all PEB players at competitive prices. Such projects amount only few percentage of total PEB market. Also execution of such projects required higher liquidity in the hands of PEB supplier owing to weaker payment terms of tender. Such projects are specifically targeted by very large scale PEB companies. With regards to safety and eco-
friendly features, how does PEB compare with conventional building materials? Steel is lighter in weight compared to RCC and hence draws less earthquake forces. Steel is safer and also recyclable. What are the key challenges in the industrial PEBs market of India? Key challenges include shortage of skilled manpower and intense competition with site fabricators. With so many PEB companies in the market, It is difficult to find welders as well as erectors. This leads to delay in completion of projects and ultimately hits profit margin of PEB supplier due to delay penalties. Could you tell us some of your recent projects? We have successfully completed 4 exhibitions sheds in Vibrant Gujarat project all together 2 Lac square feet area. All were made from Sin beams (Corrugated web). We also bagged an order for supply and erection of 10 lac square feet logistics warehouse proposed in Kheda, Gujarat. This will be also with Sin beam rafters. What is your future strategy? Today we are the only company in India to manufacture Sin Beams. Our key strategy is to become a distinct player in Indian PEB industry who can offer a light weight PEB by using Sin beams.
PEBs
“Tensile membrane finds major usage in airport and stadium projects� Tensile structures often replace glass skylights and are in comparison much cheaper also when compared to traditional concrete building structures they are more economical says RAVI KRISHNAMURTHY, Managing Director of Shadeflex India Pvt. Ltd. Could you tell us more about Tensile membrane structures? What are the latest developments in this direction? Tensile membrane structures vary vastly from other forms of building materials. Their light weight and versatility in shape and structure provides a unique range of dynamic and exciting three dimensional options introducing natural ambient light. Common materials for doublycurved structures used in the construction of tensile structures is PVC coated polyester, chosen not only for its excellent strength, flexibility and translucency but also its impressive design life of over 40 years due to new inroads in technology. It is mainly used for exterior canopies and its wide range of colours and suitability for printing also makes it ideal for banners. Also widely used for permanent exterior structures is the strong, durable and low maintenance PTFE Coated Glassfibre fabric, which has more than 40 years design life. It is completely chemically inert and resistant to moisture and 46 u EPC World u August - 2015
micro-organisms as well as having good self-cleaning properties. Alternatively, we also have membranes that are UV resistant, chemically inert, easy to maintain, versatile enough to include in any architectural membrane project. We also have a variant form of PTFE offering strength, flexibility and longevity as well as unrivalled aesthetics and its high crease resistance makes it effective for demountable and retractable canopies. Also the PVC coating contains additives that include UV stabilisers, fire retardants, colouring and anti-fungicides. There is a choice of protective PVDF (Fluorinated Polymer) lacquers that enhance the clean ability of the PVC membrane. There are other roofs with ETFE film, either as single layer or in cushion form that can provide transparency akin to glass. These can be inflated, to provide good insulation properties or for aesthetic effect. ETFE cushions can also be etched with patterns in order to let different levels of light through when inflated to different levels. They
are most often supported by a structural frame as they cannot derive their strength from double curvature. What are the conventional systems that tensile roofing systems can deftly replace? Tensile architecture covers not only complex tensioned membrane structures but also beautiful and unique sculptures and shade structures. They also make portability and knockdown features possible. One of the major advantages of tensile membrane architecture is that very few components are required to create a structure, making it comparably the speediest structure to construct. The ingenuity and scale of these structures is as boundless as the extensive freedom they offer for imaginative designs, incorporating the ambience of natural or artificial light. They are also very effective for creating entrance and walkway canopies, large span structures, and may a times as addendums to existing civil structures.
Interview
One of the major advantages of tensile membrane architecture is that very few components are required to create a structure, making it comparably the speediest structure to construct. RAVI KRISHNAMURTHY, Managing Director, Shadeflex India Pvt. Ltd
What is the level of acceptance of tensile structures in India? What are the challenges you face? Tensile structures once the prerogative of only commercial spaces, and only in tier 1 or tier 2 cities, can now be seen dotted all over the country, across a gamut of applications atrium covers, food courts, rooftop structures, car parks, pool shades to terrace gazebos et all. They find major usage in airport and stadium projects. We have an in-house team that works with the architect to design the concept, does the structural engineering for both steel and membrane, fabricates it in-house and installs it at site. The various stages undergo stringent quality control tests, ensuring a streamlined product. Not possible to dovetail if various components (steel work/ membrane panels) are sourced from different agencies leading to loss of accountability and the integrity of the structure. We also provide a post construction maintenance manual together with hands-on instruction for the maintenance staff to care for the product. It is said that the tensile membrane structures are often economical. Could you throw more light on this? Tensile structures often replace glass www.epcworld.in
skylights and are in comparison much cheaper. Also when compared to traditional concrete building structures they are more economical. But they are somewhat more expensive compared to metal sheet structures. ETFE structures provide unique solutions and are perhaps the most expensive of the lot. It is important to understand that each type of building structure is often not replaceable by another, since they have their own unique strengths and weaknesses and hence suitable solution given an application. Could you tell us few of your important projects in India? Though initially we made our mark in big span commercial ventures, we now have clients across all crosssections, both big and small, residential and commercial buildings. We have constructed the roof for Mantri Mall in Bangalore combining glass and membrane, and for Express Mall in Chennai. In Nagaland at Kohima we have constructed a large span columnless convention centre. Infosys, Biocon, Philips, Brigade, Vivantha by Taj, are some of our repetitive clients at different locales. You have set a target to double your turnover. What strategies have you
adopted to achieve the target? We are uniquely positioned in the market as a company that offers a single window solution to the discerning client from design to execution. We have a well equipped state of the art fabrication unit with in-house engineering and design team. Also we have an experienced steel and membrane fabricating team. Since we have a capability to handle all types of tensile membranes, we hope to pioneer in introducing new types of membranes as they are launched globally. Our goal definitely looks realistic to us. About Ravi Krishnamurthy: Ravi Krishnamurthy, 53 years old, is the promoter and Managing Director of Shadeflex India Pvt. Ltd. (Estd. 1999). He is a B.Tech graduate from NIT, Suratkal and alumni of IIM Ahmedabad. He has worked in various capacities in the fields of Management Consultancy, Product Management, Sales & Marketing and International Business Development in renowned national and multinational companies. He started the operation of SOMFY SA in India and was its country head for 5 years prior to establishing the Shadeflex group. Personally he has over 25 years experience in the technical membrane Industry. 47
Interview
TMT
“Fluctuation of rawmaterial prices is a major constraint in this market” Steel industry which is supporting the infrastructure growth is facing rough weather, says MOHIT MARDIA, Director, Grace Castings Ltd What are the positive changes you observed in the steel & TMT bar sector in the recent past? Steel Industry is expanding like anything. Government of India’s various economic measures has given boost to the Steel Industry. There is huge demand for Steel from sectors like infrastructure, real estate, power, automobiles etc and is likely to increase further. What would be the triggers for the growth of TMT bar in general and your company in particular? The growth of TMT Bar industry depends purely upon policy of the Government. If the Govt opens infrastructure, then & the growth of steel industry and in particular TMT bar industry and in particular our company is possible to a great extent. Do you face competition from the unorganized sector? Yes, we face tough competition from the unorganized sector as their style of manufacturing and marketing is different from the organized sector. Hence we face stiff competition from both organized as well as unorganized sectors. What are the recent trends and developments in this sector? Steel industry which is supporting the infrastructure growth is running through difficult times because of excess import of steel from 48 u EPC World u August - 2015
international market that too at very cheap prices and inferior quality. Hence steel industry is going from bad to worst time. If the Govt don’t impose anti-dumping duty, the steel industry will suffer a huge loss. What are the challenges faced by the sector? Do you think fluctuation of raw material prices a major constraint in this market? The main challenge faced by the sector is imported raw-material as well as finished goods from China and other countries at very low prices and that too of inferior quality. Further yes, fluctuation of raw-material prices is a major constraint in this market. If the market goes down nobody reduces the prices and if the prices go up, immediately all increase the prices. Hence, a total instability particularly at that time. Could you throw light on the R&D efforts of your company? GRACE TMT (Evcon Mechanically Treated) Bars are manufactured from new-generation high-strength steel by using the most advance Evotech Process. It imparts superior weldability, bendbility and better bonding with concrete to the bars, alongwith high thermal and corrosion resistance. In the Evotech process, red hot steel bars are made to pass through water cooling
(quenching) system, which cools their outer surface rapidly, leaving the core hot. Once out of the quenching chamber, heat flows outwards from the core to the surface, further tempering the bars. This process gives the TMT Bars unyielding strength, at the same time giving them superior weldability and bendabiity. The Evotech Process imparts unquestionable superiority to GRACE TMT Bars, which makes them the idle choice for a variety of applications. What latest technology/technologies you have adopted to manufacture your products? How do you ensure quality of your product? Previously Twisting Bars were used and now Electrothermo process has taken its place. recently installed fully automatic TMT BAR MILL for producing best quality TMT bar ranging from 8 mm to 32 mm with a capacity of 1,00,000 MT per annum on 3 shift basis. This is the latest technology worldwide and has added advantage of more strength compared to Twisting Bars. Hence the company decided to go for this latest technology. After putting latest and best technology to produce TMT Bar, we have complete in-house best Laboratory too for complete testing of material like UTM, Spectrometer and other equipments to ensure quality of the product.
Interview
TMT
“Every organization face competition from the unorganized sector” The typical family runs and regional businesses will be the worst hit and the space for consolidation will be limited says NIRAJ ARYA, Managing Director, Utkarsh Bars Pvt Ltd, in an interaction with EPC World … What are the positive changes you observed in the steel & TMT bar sector in the recent past ? People mind set towards better Quality product with Builder, Architect also enforcing the same with better structures to keep in competition & Builders conscious about their quality of Construction Buildings because of general public awareness about their safety in the building. Most structure are becoming Earthquake Resistant & Government norms are getting strict towards the same.
Not Much. Actually unorganized sector cannot maintain the quality standards as well as reliable marketing polices.
What would be the triggers for the growth of TMT bar in general and your company in particular? Explain. India requires lots of development in Infrastructure for all the sectors & our Government is committed to it. Any infrastructure project is directly link with the consumption of TMT Bars.Further “Make in India” Programme by Government should provide thrust to manufacturing sector. Upcoming Infrastructure projects like METRO Rail, Road Network, Smart City concept ,GIFT City, Dholera SEZ etc will have directly impact in our TMT Bar sector sales figures.
What are the challenges faced by the sector? Do you think fluctuation of raw material prices a major constraint in this market? Yes, Steel prices are a key driver of steel companies’ profitability. Steel prices in the India fell by more than 25% in last few months. Domestic steel prices are influenced by global raw material prices, demand – supply conditions in the market also plays an important role. However, in the first four months of 2015, Chinese steel demand, as measured by total output less net exports, fell 4%, versus a 2.5% drop in full-year 2014, the report said. However, steel production and capacity will remain stable as Chinese steel
Do you face competition from the unorganized sector? 50 u EPC World u August - 2015
What are the recent trends and developments in this sector? More Specific Grades & Sizes are manufactured now a days to meet the specific requirement of the project as a part of cost cutting & to compete Global competition. Our industry moving towards more efficient Integration like power generation & Hot Rolling.
companies boost exports. This spells trouble for Indian steelmakers who have been cutting selling prices drastically to beat cheap Chinese imports coming into India. Could you throw light on the R&D efforts of your company? Continuous effort towards more & more automizationwith latest technology results in increased production, consistent quality which enables us to provide better high strength deformed bars to the society with best price. What latest technology/technologies you have adopted to manufacture your products? How do you ensure quality of your product? Latest QST technology by German THERMEX for manufacturing various grades as per BIS Standards. Quality check at each every point ensures the quality with latest technology products available to measures such as spectrometer, electronic extensometer & state of art technologies adopted in the plant. What are your future plans? Looking forward to Enhance production capacity to 4 Lacs Metric Tonnes by December 2017.
Guest Article
Infrastructure
Chetan Bajpai stresses on trained infra managers
C
hetan Bajpai, Business Head, Industry Relations, Adani Institute of Infrastructure Management says that, educating is not a means of profit, but serves a real important interest; to generate jewels for Infrastructure industry. The institute draws on its solid resources, including seasoned professionals from the powerful Adani group to offer the students the best learning experience. Bajpai, who headed the Mundra Port & Free Trade Zone Infrastructure Project Development, is one of them. With his more than two decades of corporate experience and strong connections with the global industry, he is perfectly placed to help create the platform to promote interactions for students that give them the professional edge. Bajpai an Infrastructure Management specialist from NICMAR has been groomed at several reputed institutes including IIM-A, IIT-M and Jim Vallence, Kuwait. He has worked in different continents in places like the Middle East, Africa, Turkey, Vietnam and India, with multinationals like Kirby Building Systems (Kuwait), Tata BlueScope Steel Ltd, LG Electronics, Blue Star Ltd. Over the years after working on some of the best infrastructure projects all over the world he understands the fact that manpower with the right set of skills is absolutely essential for meaningful contribution to infrastructure industry. And that’s the goal for AIIM. Talking about the niche program in Infrastructure Management offered by the institute and what makes it stand out, Bajpai says, “For starters, we believe in helping students find the area that interests them the most. Coupled with our case-based and real time education method means our managers are ready to hit the ground running. The PGDM (Infrastructure Management) is ideal for fresh and experienced professionals and we have already seen results in a short span of time. Our alumni are doing well as consultants and CEOs, not only in India but in the Middle East as well,” he adds proudly. The importance of being backed by a renowned industrial house like the Adani group cannot be overemphasized. Bajpai 52 u EPC World u August - 2015
admits that students get a chance to choose the Adani Group Company to have their industrial guide from, which is a huge advantage. “Their internship starts with the 2nd semester itself. They receive real time inputs from the industry and are able to directly associate developments in the infrastructure domain. The practical nuances taught at AIIM are not taught in any other B-school in the country. They have 2 to 3 industrial visits every semester, which cover the Infrastructure industry from ports to power sector,” he explains. With his own connections with the industry in different parts of the world, Bajpai has been entrusted with a crucial responsibility. He is in charge of the industry connect initiative and sheds light on it when he says, “Its purpose goes way beyond placements. The idea is to bring industry leaders together to shape young minds. Increased Industryacademia relationship leads to research and prepares students to easily integrate with the industry. With my past background I’ve had the opportunity of opening up industry access to AIIM. We intend promoting industrial visits and Interactions, and encourage students to work on live challenges faced by the industry.” AIIM also supports the Infrastructure Industry with its research and consultancy on various Projects & Assignments. This institute is gradually bringing in the change in the way Infrastructure projects have to be conceived, designed, participated, executed and operated. AIIM tries to offer hands-on experience to students through these interactions, MDPs and live projects. The initiatives have also opened up opportunities and roles in various sectors for the graduating students, admits Bajpai who also has an important message for interested students. “The Adani Group is easily one of the best places to work in the infrastructure sector. We want to create brand ambassadors in the infrastructure sector by promoting talents groomed at AIIM. Our Management graduates should be the very best; loaded with contemporary knowledge and skills to be immediate starters into the corporate field,” he concludes strongly.
Infrastructure
What is your business vision? What courage and risk-taking mean to you in practical terms? Our vision is to see Angelique International Limited become a truly global Indian EPC company.We look to contribute to the infrastructure development of the developing economies in Africa, South East Asia, Middle East and Latin America. We promote Innovation, Continuous Learning, Teamwork and Open Communication. I have realized the size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way. I see the thrill is not in the money, but the thrill is in bringing the vision to life. How vital is leadership as one of the best practices in Angelique? I follow a style of leadership that
During 2015-2019, one of the major drivers of the EPC market in India is the infrastructure investment by the GOI. Many EPC contractors are forging technical partnerships, especially with foreign players. AJAY KRISHNA GOYAL, President & MD, Angelique International Ltd
“The government is increasingly focusing on industrial & infra sectors” The major EPC industry players in India need to help in building a talent pool for the industry, says AJAY KRISHNA GOYAL, President & Managing Director, Angelique International Ltd in an interaction with EPC World essentially deals with unlocking people’s potential to deliver better than their best. We value our employees and regard them as the partners in progress. We believe in leadership model based on education, outlook, vision, ethics, code of conduct, and of course, internal communication. How qualitative organizational development (QI) is planned in 54 u EPC World u August - 2015
Angelique? QI in Angelique is a practice that looks to enhance organizational performance and individual development. These are well inclusive of methodologies and approaches to strategic planning, organization design, leadership modeling and development, change management, performance management, coaching, diversity, team
building, and managing future change. Excellence is the unlimited ability to improve the quality of what we have to offer. Hence quality is everyone’s responsibility in Angelique. What are your core sectors of operations? Power (generation of hydro-power & thermal, transmission lines, distribution sub-stations, rural electrification– grid& solar), Water (public water supplies, water treatment plants, potable drinking water, pumping stations), Irrigation & Agriculture (irrigation of dams & canals, flood prevention, farm mechanization, agro processing plants), Industrial Projects (textile spinning & ginning plants, industrial parks, workshops) and Social Infrastructure (education, health, transport, housing) What are your major projects so far? Since the inception of the company in 1996 the company has completed
Interview
more than 200 projects spanning across over 40 countries in Africa, South Asia, South East Asia, Middle East and Latin America in our core sectors. A special reference is deserved for Hydropower projects and Tractor assembly plants which Angelique has the unique distinction of being a leader. Of the various projects – the prominent ones are: Power Interconnection Project in Mali – Cote d’Ivoire, Hydropower Projects in Rwanda, Burundi, DR Congo and Lao PDR, Electricity transmission lines in Cameroon, Sudan, Burundi, Mali and Cote d’’Ivoire, Rural Electrification projects in Mozambique, Senegal, Guinea, Burkina Faso, Angola, Textile Mill in Tchad, Tractor Assembly Plants in Mali, Tchad and Benin, IT park in Swaziland, Irrigation projects in Cambodia, Lao PDR, Mali, Public Water Supply projects in Sierra Leone, Equatorial Guinea, Mauritania and DR Congo, Transport Projects in Guinea, Niger, DR Congo and Republic of Congo, Farm Mechanization projects in Cameroon, Sierra Leone, Swaziland, Education & Health sector projects in Zambia, Mozambique. How is India shaping as an EPC market? What opportunities are there? EPC market in India is exceptionally large.We expect the EPC market in India to grow at a CAGR of 20% over the period 2014-2019. The construction sector in India is the country’s second-largest economic segment after agriculture. It employs more than 40 million people and contributed around 8% to the national GDP. During 2015-2019, one of the major drivers of the EPC market in India is the infrastructure investment by the GOI. Many EPC contractors are forging technical partnerships, especially with foreign players. As per the 12th five-year plan, the Government of India has targeted an www.epcworld.in
investment of US$1,020 billion in infrastructure development during 2012-2017.Power sector grabs the major share in this plan. The government is increasingly focusing on industrial and infrastructure sectors. The major EPC industry players in India need to help in building a talent pool for the industry. What is Angelique’s future strategy to uphold the standard of excellence? We have successfully leveraged our experience and expertise of executing large and complex projects in India and overseas. We have already a global network of 32 offices across Africa, Middle East and South East Asia. Our strategy over the next 3-5 years is to establish Angelique as one of the top international EPC companies with our leadership and expertise in multiple sectors. List your major awards or recognitions The company has received awards in recognition of its expertise and performance in India as well as overseas. • A STAR TRADING HOUSE status by The Ministry of Commerce & Industry in 2014 • NIRYAT SHREE award by The Ministry of Commerce & Industry for outstanding export performance for 2009-10 and 2010-11 • BEST EMERGING COMPANY award by Business Today in 2014 for Global Business Excellence
• CII-EXIM BANK award by CII and EXIM Bank of India in 2012 for Strong Commitment to Excel • ECGC AND DUN & BRADSTREET award by D&B in 2012 for Excellence in Exports • CERTIFICATE OF EXCELLENCE by INC 500 in 2011 in recognition of exemplary growth • The highest honor of Mali, the COMMANDER DE L’ORDE NATIONALE DU MALI by The Hon’ble President of Mali in 2011 conferred on late Chairman Daya Krishna Goyal Tell us something about brand Angelique? What’s your vision 2020? To contribute significantly to the development of infrastructure of developing economies with a focus to Engage, Entrust, Energize, Enrich and Empower. And become a truly global Indian company. 55
Waste Management
What is the current status of solid waste management in India and what are the factors that lead to slower growth in this sector? What is your contribution towards this? The current status of solid waste management in India leaves a lot to be desired. Collection & transportation is not being done efficiently and as a result a lot of solid waste does not end in any waste processing facility. At present it is estimated that total solid waste generated in India is 62 million tonnes annually in the urban areas out of which only 20%is treated scientifically. Various factors like poor collection, poor segregation and low capacity processing units leads to slower growth in solid waste management. The NIMBY syndrome (Not In My Backyard) is prevalent and we are not averse to dumping our waste in our neighbours backyard and on the
Misguided public agitation & NIMBY syndrome are the main challenges faced by us while setting up a solid waste management project in India. Some other challenges are non-availability of source segregated waste, land for the project etc. SAMEER REGE, CEO, Mailhem Ikos Environment Pvt Ltd
“Swach Bharat Abhiyan is the first step towards waste management” Modifying of the MSW Rules 2000, getting waste management under the CSR umbrella, more teeth to National Green Tribunal (NGT) etc are driving the growth of waste management market in India, says SAMEER REGE, CEO, Mailhem Ikos Environment Pvt Ltd streets. This lack of basic hygiene is a big hindrance in solid waste management. The basic attitude is that “I pay taxes, so it’s the Government responsibility to take away my waste”. The root cause identified is lack of awareness in solid waste management and a concentrated effort is required to instill this awareness and healthy 56 u EPC World u August - 2015
well-being in our society. So various awareness campaigns and “Practice What You Preach” is taken up by us. What are the latest technologies that you are using for this purpose? We at MailhemIkos use the following four technologies to handle different type of solid wastes like-
Dripping wet organic waste from Vegetable & Fruit Market Yards, Segregated Wet Waste from Households, Hotels, Restaurants, and Canteens – Modified High Rate UASB Technology (High Rate Biogas for cooking & power generation). These capacities vary from 200 kg/day to 50 Ton/day. In Agro waste, we use CSTR Technology for biogas purification & bottling. These capacities vary from 20 Ton/day to 100 Ton/day. Mixed Municipal Garbage without recyclables – Bioreactor with Capping & Gas extraction. These capacities vary from 50 Ton/day to 1000 Ton/day. For Plastic waste, we use Plastic to Fuel Oil with pyrolysis technology to generate Low Density Furnace Oil and Syn-Gas. Typical capacities are 2 ton/day to 10 ton/day. With regards to Waste Management, what are the important changes that you observe in the recent past in India? With the launch of ‘Swach Bharat
Interview
Abhiyan’, Ministry of Urban Development, Government of India has taken the initiative or first step towards “Open Defecation free Society” and efficient solid / liquid waste management. Various awareness campaigns and workshops are being organised to sensitivise government officers, consultants, technology providers, NGOs and the general public at large. Ministry of New & Renewable Energy, GOI has initiated the launch of Biogas Mission – similar to The Solar Mission 2020. Ministry of Environment & Forest, GOI has worked feverishly to give environmental clearances for solid waste processing projects. Social TV programs like Satyamev Jayate have given a fillip to public awareness. Overall we observe that a lot of work has been initiated in solid waste management programs. What are the challenges you face while carrying out a project in India? Misguided public agitation & NIMBY syndrome are the main challenges faced by us while setting up a solid waste management project in India. Some other challenges are non-availability of source segregated waste, land for the project, poor tipping fee concept and a general apathy towards these waste processing projects because dumping was easy. www.epcworld.in
What are the main growth drivers for waste management markets? The main driver for waste management projects today is the Government’s initiative for Swach Bharat (planning, financing & implementing), modifying the MSW Rules 2000, getting waste management under the CSR umbrella, more teeth to National Green Tribunal (NGT) and encouraging Green Energy Bonds.
(IOT) for remote monitoring is improving by leaps and bounds. IS code for Bio-Methane (bio-CNG) has ensured quality and standardization in biomethanation techniques. Waste treatment projects are now even getting ISO certified for quality in processes. About Sameer Rege: Since 1998, Sameer has been actively leading, first as Managing Director in Mailhem Engineers and now as the CEO of
What are the new technological trends observed in Solid Waste Management? There is a thrust for executing solid waste management projects in PPP / BOOT mode which has ensured that there is technological improvements in RDF, incineration, composting and biomethanation techniques. There are lots of lessons learnt from some failed projects especially in RDF and Waste to Energy projects. Composting has improved with better bio-cultures in the market, spray composting, in-vessel / mobile composting techniques. Pyrolysis process for plastic to fuel has improved with lesser / nonexistent wax content. Air pollution monitoring & controlling equipment has also improved. Bioreactors with capping of existing dumpsites with gas extraction is gaining ground. Automation, Instrumentation and Internet Of Thing
Mailhem Ikos. Sameer manages project implementation for Mailhem Ikos, overseeing all aspects of the company. With years of experience, he has executed more than 250 projects spread across the length and breadth of India. Responsible for the corporate development, growth of Mailhem Ikos as well as the daily operations, Sameer is a source of inspiration for everyone at the company. A graduate chemical engineer from Bharati Vidyapeeth College of Engineering, Pune, Sameer was always keenly interested in environmental management. Having specialized in Environmental Design from Vishwakarma Institute of Technology (VIT), Pune, he has since spearheaded the business of Mailhem Engineers – first as design and engineering leader and subsequently as the business head of the organization.
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Infra Finance
Fiscal Reforms Key to India’s Infrastructure Development The large interest payments and subsidy spending in budgetary expenditure are signs of fiscal risks because they leave little for the central government to spend at its discretion, after necessary social services expenditure.
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ithout further fiscal reforms, the Indian government may find it difficult to sustain the increase in public investment spending, according to a report, titled “India’s Fiscal Roadblocks Could Stall Infrastructure Progress,” that Standard & Poor’s Ratings Services published recently. “Although India’s budgetary performances have strengthened in recent years, its hard-won fiscal improvements could yet unwind because of a financial or commodity shock,” said Standard & Poor’s credit analyst Kim Eng Tan. “Subsidy spending is one key source of weakness, despite fuel-subsidy reforms in 2014. Another constraint is the heavy government debt.” The report notes that the central government budget deficit in India has fallen in recent years, relative to GDP. However, the latest-year deficit reduction didn’t come easy. Disappointing tax collections, especially services tax collection, dragged estimated total revenue for the fiscal year ended March 2015 6.3% below the central government’s initial budget projection. The government had to cut spending by a similar proportion to prevent the budget shortfall from widening. Since the subsidy bill came in above expectations, the government made significant cuts to capital investments to bring spending down. “The central government’s willingness to cut spending to rein in the budget deficit indicates the high priority of fiscal prudence on its agenda,” said Mr. Tan. “From an institutional and governance point of view, this supports the sovereign credit rating on India [BBB-/Stable/A-3]. However, structural 58 u EPC World u August - 2015
fiscal weaknesses continue to be vulnerabilities of Indian sovereign credit worthiness.” The large interest payments and subsidy spending in budgetary expenditure are signs of fiscal risks because they leave little for the central government to spend at its discretion, after necessary social services expenditure. Further constraining public infrastructure financing is the government’s relatively small share of GDP that it collects as revenue. This is why public investment in India has been persistently lower than that of some other developing countries. The central government appears intent to change this. It has bumped up capital spending for the fiscal year to March 2016 by more than 25%, which is significantly higher than the average 5.4% growth since fiscal 2011-2012. According to Standard & Poor’s, an unexpectedly sharp increase in interest rates could still raise India’s budgetary interest payments. Similarly, if food and fertilizer prices are markedly different from assumed levels, the subsidy bill could be larger than expected. In either scenario, particularly if divestment targets are also not met, the government could find it necessary to cut capital spending again to meet its deficit target. Under Standard & Poor’s policies, only a Rating Committee can determine a Credit Rating Action (including a Credit Rating change, affirmation or withdrawal, Rating Outlook change, or CreditWatch action). This commentary and its subject matter have not been the subject of Rating Committee action and should not be interpreted as a change to, or affirmation of, a Credit Rating or Rating Outlook.
Oil and gas
Negative Outlook on Shipping Sector to impact oil and gas sector Offshore segment will face the negative impact of lower crude oil prices.
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ndia Ratings and Research (Ind-Ra) has maintained a negative-to-stable outlook for the shipping sector for FY16. It is expected that the performance of dry bulk and container operators to continue to be affected by weak global trade growth and persistent overcapacity, while the offshore segment will face the negative impact of lower crude oil prices. The agency however believes that the tanker segment which accounts for a majority of the Indian fleet will remain an exception due to its better demand-supply situation. 60 u EPC World u August - 2015
Ind-Ra has also assigned sub-sector outlooks for FY16 as follows: Stable Outlook for Tanker Segment: Global demand for tankers increased in 2HFY15 as the sharp drop in crude oil prices resulted in floating storage and onshore stockpiling. This along with a rise in long haul trade due an increase in crude oil purchases from Africa and Latin America by Asian buyers led to an increase in spot freight and time charter rates which has
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duction companies globally have suspended or curtailed expansion plans due to lower crude oil prices, which has impacted the demand for vessels in the offshore segment, leading to lower day rates and utilisation levels globally. The operating performance of companies in the segment is thus likely to weaken in FY16. Companies servicing state-owned enterprises will also be affected in FY16 even though state-owned oil companies are likely to continue offshore activities albeit at a lower intensity. This is because charter rates with shipping companies will be renegotiated at lower levels. Negative Outlook for Dry Bulk Segment: The oversupply in the dry bulk segment along with weaker demand conditions particularly in China kept freight rates low throughout FY15. The agency expects the segment to be under pressure again in FY16 as overcapacity will persist and demand growth will remain subdued. Negative Outlook for Container Segment: Continued increase in global container capacity (FY15: 6.2%; FY14: 5.6%) coupled with subdued demand conditions have led to a decline in container freight rates across most routes since the start of 2015. The agency expects freight rates to stay under pressure for the rest of FY16 as global capacity growth will continue to outstrip demand growth. As a result, the operating margins of container operators will decline in FY16. Impact on Credit Profiles: The agency expects the leverage indicators of shipping companies to remain high in FY16 as performance across most segments will be subdued. The credit metrics of companies in the offshore segment will weaken in FY16 as their margins are expected to decline. The credit profile of companies in the tanker segment will also not show a meaningful improvement, despite the segment’s better fundamentals, as most companies also have a sizeable presence in other segments which are expected to perform weakly.
OUTLOOK SENSITIVITIES
continued into FY16. The rates however will come down gradually during the year as demand will not sustain at the current artificially high levels. Nevertheless, the decline will be limited only to moderate levels as the fundamentals of the segment have improved over the last couple of years with an improving demand-supply scenario. Global capacity additions over the last two years have been only marginal (FY15: 2.2%; FY14: 0.2%). Negative Outlook for Offshore Segment: Exploration and prowww.epcworld.in
Higher Capacity Additions: A higher-than-expected capacity addition in the tanker segment could lead to the outlook for the segment being revised to negative. Absorption of Capacity: An improvement in trade activity leading to an improvement in the demand-supply scenario could lead to a revision in the outlook for the container and dry-bulk segments to stable. Recovery in Crude Oil Prices: An increase in crude oil prices leading to an improvement in charter rates and the utilisation levels of offshore vessels could lead to a revision in the outlook for the offshore segment to stable. 61
Oil and gas
Trend Fuel Prices
Outlook for Indian Tankers Indian tanker operators will continue to benefit from high charter rates globally; however, the benefit will only be short lived as rates will come down eventually. The traffic of crude oil and product tankers at Indian ports was subdued in FY15, registering a decline of 3.3% (FY14: up 0.7%) due to weak export shipments. The agency expects growth in shipment volumes at Indian ports to continue to be muted in FY16 as well. Nevertheless, the demand-supply scenario in this segment is balanced relative to other segments, resulting in better fundamentals for the segment as a whole. Consequently, the agency expects the operating margins of Indian shipping operators in this segment to stay sound.
Commodity-wise Traffic Handled at Major Indian Ports - FY 15 (Provisional)
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Lower Oil Prices Impacting Global Offshore Activity Ind-Ra expects global demand for drill ships, jack-up rigs and other offshore vessels to remain subdued in FY16 as E&P companies globally have suspended or curtailed expansion plans because of the fall in crude oil prices. Lower demand has resulted in significantly lower day rates and utilisation of vessels. As a result, performance of companies in this segment is likely to be weaker in the coming year. Support from Exploration Activity of Public Sector Undertakings Indian companies providing services to state-owned companies will also be affected by falling crude prices and lower utilisation of vessels globally as contracts are expected to renegotiated at lower rates; however, demand from state-owned oil
Baltic Exchange Tanker
Trend
Tanker Time Charter Equivalents
Crude Oil Fleet Statistics
Global Offshore Rig Utilisation by Rig Type Rig type
Current (%)
One month ago (%)
Six months ago (%)
One year ago (%)
Drillship
68.3
67.8
71.3
82.7
Inland Barge 17.6
17.6
41.2
58.8
Jack-up
58.8
62.5
73.1
76.6
Platform
26.4
35.2
38.9
43.8
Semisub
67.4
70.2
80.9
71.1
Tender
56.8
58.3
62.9
69.7
Source: Rigzone (on 7 July 2015)
companies is unlikely to weaken as they will continue offshore activities albeit at lower intensity. As a result, operators providing services to state-owned companies will be affected to a lower extent than those shipping companies which have deployed their vessels in overseas waters. www.epcworld.in
Capacity Addition to Keep Rates under Check Global capacity in the container segment increased 6.2% in FY15 (FY14: 5.6%, FY13: 3.9%). Despite the additional capacity and muted global trade growth, container freight rates had remained more or less steady during 2014. However, since the turn of the year, freight rates globally across most routes have shown a declining trend. Freight rates for the Indian SubContinent to most regions also declined. There was however an improvement in rates for transport from the Indian SubContinent and Middle East to North America as US consumption continued to recover. Order book as a proportion of outstanding capacity (dwt) remained high at 16.8% in FY15 (FY14: 19.6%, FY13: 20%), indicating that incremental capacity addition is likely to continue. Ind-Ra expects global containership fleet growth to continue to outpace trade growth hence, freight rates will remain under pressure. Furthermore, operators are likely to pass on the benefit of lower fuel prices to customers given the high competition for cargo. 63
Real Estate
India residential market gasping for breath Last two and a half years witnesses a continuous drop in residential launches and sales. The residential sector is reeling under immense pressure with the majority of stakeholders believing that prices are likely to remain stagnant in the next six months, the report says. In fact, a third of them foresee prices to witness corrections during that period. Also, home sales have witnessed a consistent decline in the last 10 quarters, and survey respondents foresee new launches and sales to drop even further by the end of 2015.
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Feature
www.epcworld.in
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fter a resounding uptick in economic sentiments last year, resentment over the pace of economic recovery eclipsed the business mood, and consequently, the office space absorption growth in the country’s financial capita. According to property consultant Knight Frank India, investor interest in residential property is expected to remain muted on account of suboptimal returns in comparison to other asset classes such as equity and debt. A gradual improvement in employment outlook, coupled with lower consumer inflation and housing loan interest rates, would augment end user demand in H2 2015, resulting in housing sales of 34,135 units – up 20% sequentially compared to the first six months of 2015. In comparison to H2 2014, this will translate to a decline of 6%. A re-look at stakeholder expectations for March 2015 in comparison with reality gives an interesting perspective on the dynamic nature of real estate markets. The survey we conducted during Q3 2014 ( June–September 2014) gave us positive results on all real estate parameters for the subsequent six months. While the ground reality for the six months ending March 2015 is consistent with the expectations in the case of office space leasing volumes and rental appreciation, new completions have actually reduced. Reality has played truant in the case of the residential sector, wherein what actually transpired was contrary to the expectations. Delayed reforms have weakened the current business sentiment, which explains the downward trend in the current score, which has entered the negative zone for first time after the last central government election. Although the future score, at 62, falls in the positive territory, the declining trend reflects that business confidence is weakening. The stakeholders are particularly pessimistic about the residential sector and they do not foresee any significant recovery till the end of 2015. However, developers and financial institutions are still maintaining a positive outlook for the office market.
tainty over Mumbai’s new development plan is expected to be resolved by August 2015 and developers gauge higher enquiries, new project launches, at 20,776 units, will be 10% more, sequentially – relatively lower than the absorption growth on account of unsold inventory pressure. Compared to H2 2014, this will be a decline of 23%. While new launches and absorption are estimated to improve in H2 2015 in comparison to the last six months, we forecast stagnation in property prices on account of high unsold inventory and low investor interest. The price growth since H2 2014 will stand at 3%. Among the
Overall outlook In next six months, i.e. H2 2015, it is estimated that there will be a modest improvement in market momentum—demand and supply—coinciding with stagnation on the price front. Investor interest in residential property is expected to remain muted on account of suboptimal returns in comparison to other asset classes such as equity and debt. A gradual improvement in employment outlook, coupled with lower consumer inflation and housing loan interest rates, would augment end user demand in H2 2015, resulting in housing sales of 34,135 units – up 20% sequentially compared to the first six months of 2015. In comparison to H2 2014, this will translate to a decline of 6%. On the supply side, even while the uncer66 u EPC World u August - 2015
micro-markets, Thane and the Peripheral Central Suburbs are expected to benefit on account of their relatively affordable property prices, coupled with improved connectivity to office locations in Mumbai through a slew of infrastructure project completions last year. Locations such as Kalyan and Dombivili would benefit on account of improving road connectivity to the Navi Mumbai office market through Mahape Road. The Western Suburbs and Central Suburbs will attract more buyers in the over `20 mn ticket size that has traditionally been the domain of the South Mumbai and Central Mumbai micro-
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markets. The Peripheral Western Suburbs will continue to be driven by price conscious homebuyers on account of the plethora of options available in the sub-`5 mn ticket size housing. Planned development, the underconstruction metro rail and the upcoming international airport make Navi Mumbai a sought-after market. Residential developments on Palm Beach Road would continue to command premium valuations. Projects in Taloja, Kalamboli, Kamothe, Ulwe and Panvel would drive demand in the less than ` 7.5 mn ticket size category After a resounding uptick in economic sentiments last year, re-
sentment over the pace of economic recovery eclipsed the business mood, and consequently, the office space absorption growth in the country’s financial capital. The MMR office market witnessed an absorption of 2.5 mn sq ft in H1 2015, a clear stagnation in market momentum in the recent past – unchanged compared to H1 2014 and down 48% in contrast to H2 2014. In response to the muted demand scenario, project completions were put off, and, as a result, 2.3 mn sq ft of new completions were recorded during this period, declining by 20% compared to H1 2014 and 64% compared to H2 2014. www.epcworld.in
With the latest addition, the stock and occupied stock in the MMR stands at 114 mn sq ft and 89 mn sq ft, respectively. At a 21.9% vacancy level, which is a tad lower than H2 2014, the market has a vacant stock of 25 mn sq ft. Although the market vacancy has remained high during the last few years, there is a dearth of large size quality office space. With occupiers interested to sign in built to suit (BTS) facilities, developers are now opening up to opportunities for development of office buildings to cater to such demand.
Fundamentals Economic fundamentals are showing robust trends, substantiating the expected growth in the economy. Inflation has been controlled; the wholesale price index (WPI) has stayed in the negative territory for the last eight months; and the consumer price index (CPI) has also come down to 5.4%. Although this has instilled confidence in real estate stakeholders about the future, the current sentiment is sluggish. The current score, at 49, has reached the pre-election level and reflects a negative sentiment. The stakeholders believe that the current market scenario is worse compared to six months ago. Delayed reforms seem to have affected the sentiments. Another factor that has had a negative impact on the current score is the under performance of the residential market. Nearly 50% of the respondents are of the view that the current residential launches, sales and price appreciation are at a much lower level than six months ago. Ÿ While the current sentiment is negative, the future sentiment score stands at 62.Though the score indicates that the coming six months are likely to be better, this continuous four-quarter fall reflects the waning stakeholder confidence. Knight Frank India has launched the third edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the residential and office market performance across six cities for the period between January– June 2015 (H1 2015). This time around, the report also includes the residential market analysis of Ahmedabad & Kolkata for the same period. The residential sector is reeling under immense pressure, with a consistent decline in home sales since the last ten quarters. This slowdown has had an impact on stakeholder sentiments for the future as well. Nearly a quarter of the survey respondents feel that new launches and sales will drop even further by the end of 2015. This view is consistent across all the zones. The persistent fall in demand has manifested itself in the slackening growth rate of the capital values across all the zones. This has also had an adverse impact on the stakeholder sentiment for price growth in the coming six months. Nearly one-third of the survey participants feel that residential prices will witness some correction by the end of the year 2015. 67
Real Estate
There is a revival in sentiments for the economy in Q2 2015. More than two-thirds of the stakeholders believe that the economic scenario will strengthen further in the coming six months. However, there is a concern about the funding scenario – the majority of the stakeholders believe that it will either remain the same or worsen by the end of the year.
Residential takeaways:• India residential market at an inflexion point first time in last 5 years • Current unsold inventory levels stand at over 7 lakh units; would take over 3 years to exhaust • Market sees a sharp drop in price growth; reduces from 9%2% in the last three years • Residential market will not see arecovery in the next six months
All-India Residential market launches and absorption
All-India Residential unsold inventory
All-India Residential price growth
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Stakeholder sentiments continue to remain relatively strong about the office market. There has been an improvement in business sentiments recently, leading to a higher demand for office space. The survey respondents believe that the demand for office space will strengthen even further in the Leasing Volume New Office Supply Office Rental Appreciation 8% 40% 52% 10% 39% 51% 12% 48% 40% 0% 31% 69% coming six months. However, there are concerns regarding the supply of new office spaces. Ÿ In Q2 2015, the majority of the respondents believed that the rentals would firm up by December 2015.
Office Takeaways:• Severe shortage of good quality office space; demand consistently surpassing supply since 2014 • Office market turning from a tenant driven to a landlord fa-
All-India Office market trend
All-India Office rental growth
All-India sector wise absorption split
Real Estate
vouring market • Other services sectors including e-commerce, consulting and mediagaining prominence during H1 2015 Speaking about the findings, Shishir Baijal, Chairman & Managing Director, Knight Frank India said “Despite economic scenario strengthening we are seeing no improvement in the residential market across the top eight cities. While sales dropped by nearly 20% during January - June 2015 compared to the same period last year, new residential units coming into the market fell by 45%. Going forward we do not see any improvement until the end of 2015 in terms of sales.” “The turnaround in the office space market which was witnessed in 2014 has been maintained on the back of improving business sentiments and recovery in the domestic economy. We have observed office space transactions to the tune of 18 million sq ft during January – June 2015 across the top six cities. The average vacancy level across these markets stands at 17% - the lowest since the global financial crisis. Leading ecommerce players are nowemerging as strong drivers and have inked office space deals upwards of a million sq ft each in recent months.
Reality index The real estate sentiment index is based on a quarterly survey of key supply-side stakeholders, which include developers, private equity funds, banks and non-bank financial companies (NBFCs). The survey comprises questions pertaining to the economy, project launches, sales volume, leasing volume, price appreciation and funding. Respondents choose from the following options, for which weights have been assigned: a) Better (100 points) b) Somewhat Better (75 points) c) Same (50 points) d) Somewhat Worse (25 points) and e) Worse (0 points). The index is determined by calculating the weighted average score of the percentage of responses in each of these categories. Hence, a score of 50 represents a neutral view; a score above 50 demonstrates a positive outlook, and a score below 50 indicates negative sentiment. In order to present a holistic view of the real estate industry, two indices are computed: the current sentiment index indicates the respondents’ assessment of the present scenario compared to six months ago; and the future sentiment index represents their expectations for the next six months. However, the rest of the analysis focuses only on the future sentiment. This survey was conducted from April to June 2015.
Residential takeaways:• Housing market still under pressure; H1 2015 witnesses a 47% drop in new launches 70 u EPC World u August - 2015
MMR Residential market trend
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Office Takeaways: • Mumbai maintains its pace of 2014; records office space transaction of 2.5 mn sq ft in H1 2015 • IT/ITeS find greener pastures across Bengaluru, Hyderabad, Chennai and Pune; State’s new IT/ITeS policy – unlikely to be the game changer • Improved east-west connectivity owing to the metro and the SCLR will drive office demand in H2 2015 across Ghatkopar, Andheri, Versova among others • Banks, Manufacturing & Media consulting continue being the anchor for MMR’s office market; Office absorption is forecasted at 5.8 mn sq ft in H2 2015 - an increase of 20% compared to H2 2014.
New completions and absorption
• Nearly two lakh unsold homes in Mumbai; Sales continue its downhill ride • Launches plummet by nearly 70%, while demand dives 30% over the last 2 years • Confusion over Mumbai’s new Development Plan 2034 impacts approvals for new projects • Airport on the anvil, will prices in Navi Mumbai take flight? Currently commands prices in the range of INR 4,500 to 15,000/sq ft www.epcworld.in
Speaking about the findings, Dr. Samantak Das, Chief Economist & National Director - Research, Knight Frank India said, “Despite delayed reforms in the economy and concerns across the globe, the Indian economy is doing reasonably well with basic fundamentals showing a strong foothold. This has had a positive impact on the office market that did see a turnaround in 2014 and the pace continues in 2015. Although Mumbai holds a mixed portfolio of occupiers, media consulting, ecommerce and manufacturing sectors are showing a perceptible positive traction. Going forward, we expect Mumbai to clock office transactions of 7.7 million sq ft during 2015. Residential market on the other hand is still reeling under tremendous pressure with drastic drop in new launches at the back of falling demand. The recovery of the residential market does not seem eminent until 2015 and we expect sales to be in the range of 63, 000 units which is marginally below the 2014 levels.” Adding on the office market findings, Viral Desai, National Director, Office Transactions, Knight Frank India, said, “Mumbai developers have begun showing interest towardscommercialdevelopments which was not the case in the last 2-3 years. Two reasons for this, firstly office space has shown robust growth in demand on the back of improved economicsentiments and second, with the residential market slowing down,developers foresee the office market to be more lucrative. Although valuations within the office market are lower as 71
Real Estate
compared to the residential space, the demand however, is a sustained one. Additionally, supply of Grade-A office spaces have reduced which may lead to a marginal increase in rents across select locations. This will also lead to a resultant increase in the demand of Built to suit office spaces.Going forward, I expectabsorption to clock 5.8 mn sq ft – an increase of 20% compared to H2 2014.”
Over 7 Lakh Housing Units Unsold in Top 8 Cities Over 7 lakh housing units remain unsold in eight major cities and it will take more than three years to exhaust the inventories, property consultant Knight Frank India reveals. The national capital region (NCR) market had 1.9 lakh unsold homes as of June. Residential market, which is facing a huge slowdown in demand for last 3-4 years, would “not see a recovery in the next six months”, the consultant said in a statement. Housing sales dropped by 19 per cent and new launches by 40 per cent during January-June 2015 in eight cities compared with the year-ago period. These cities are Delhi-NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad. “Current un72 u EPC World u August - 2015
sold inventory levels stand at over 7 lakh units; would take over 3 years to exhaust,” said the consultant. Knight Frank India CMD Shishir Baijal said: “Despite economic scenario strengthening, we are seeing no improvement in the residential market across the top eight cities. Going forward, we do not see any improvement until the end of 2015 in terms of sales.” Its chief economist & director, research Samantak Das said the Mumbai Metropolitan Region (MMR) has the maximum unsold inventories at 1.95 lakh units followed by Delhi-NCR 1.9 lakh homes. He said the home launches have declined by 40 per cent to 95,400 units in the first half of 2015 compared with 1.6 lakh units in the same period last year. Sales volume fell by 19 per cent to 1,10,300 units from 1,36,000 units during the period under review, Das added. “We do not see recovery in housing market as demand is subdued and sales are slow. Sales are happening only where the price points are right and builder has good track record on project delivery,” he said “Lack of confidence of consumers in project completion is actually deterring them in taking a decision to buy homes,” Das said, adding that price remain a concern in Mumbai market. “There is total lack of confidence in the Delhi-NCR housing market,” he observed.
Real Estate
The Road to a smarter city in Indian Real Estate Sector 74 u EPC World u August - 2015
Guest Article
In the context of India, the smart cities concept is by and large a new. In a smart city, infrastructure and amenities such as water, sanitation, energy, transport, public safety etc. are integrated and managed through technology for efficient governance and delivery As these projects expand and mature individually, Indian cities will be ready for technology integration – which is in a nascent stage right now. www.epcworld.in
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Real Estate
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he concept of a smart city is a relatively new one. Cities in the developed world are formulating technology master plans and then using these plans to develop a citywide command and control network that monitors and optimizes the delivery of services like power, water, traffic and healthcare. The basic premise of a smart city is making infrastructure network and delivery of services more efficient – across telecommunication, logistics, water and gas supply. A smart city uses information and communication technology to provide public services more efficiently. In a smart city, infrastructure and amenities such as water, sanitation, energy, transport, public safety, education and health care are integrated and managed through technology for efficient governance and delivery. The essential features include smart parking and traffic management, smart grids, smart lighting, efficient waste management. Indian cities, in a small way, are using advanced technology within departments to solve problems. These include traffic control, using sensors to monitor water leaks, tracking garbage trucks through global positioning systems to ensure they dump their waste at designated landfills, energy management in smart buildings and complexes. Also under development are smart townships that are controlled centrally, and entire cities along the Delhi-Mumbai Industrial Corridor. As these projects expand and mature individually, Indian cities will be ready for technology integration – which is in a nascent stage right now. A smart city’s core infrastructure is information technology, where a network of sensors, cameras, wireless devices, data centres forms the key infrastructure providing essential services. Being environmentally friendly, smart cities use sustainable materials for building facilities and reduce energy consumption. Typically in a smart city, sensors will provide real-time inputs to a control centre on clean water, energy, public transport, public safety, education, and healthcare. Intelligent communication tools will let administrators manage and respond to emergencies quickly as well as provide residents with constant real-time inputs. Even in India, there are departments that are beginning to employ smart technologies. Bangalore’s traffic police have 180 cameras around the city managed from a control room making it the most advanced traffic management system in India. India’s population projected to live in its cities by 2030. Smart Cities focus on the most pressing needs and on the greatest opportunities to improve quality of life for residents today and in the future. India will need about 500 new cities to accommodate the rapid influx of population into its urban regions. Interestingly, urbanization in India has for the longest time been viewed as a by-product of failed regional planning. Though this is inevitable, and will only change when the benefits of urbanization overtake the costs involved, it is an opportunity for achieving faster growth. With increasing 76 u EPC World u August - 2015
urbanization and the load on the land in rural areas, the Indian government is focusing on the need for cities that can cope with the inherent challenges of urban living and also be magnets for investment to catalyze the local economies. The announcement of ‘100 smart cities’ falls in line with this vision. Seven new cities coming up along the Delhi-Mumbai Industrial Corridor will also use smart technologies with a total investment of $90 billion over a decade.
With urbanization being the buzzword, newer cities are getting created and the infrastructure of existing ones is being upgraded. With increasing urbanization and load on the land availability in rural area, Smart Cities are the need of hour in developing country like India. Such cities can aid in coping with the inherent challenges of urban living and also will be magnets for investment to catalyze the local economies. A smart city offers a superior way of life to its inhabitants, and literally is a win-win situation that benefits everybody, including denizens, businesses, the government and moreover the environment. Some important aspects that could enhance the Smart City Concept include smart governance, smart energy, smart building, smart mobility, smart infrastructure, smart technology, and smart healthcare and smart citizen. The Mega
Guest Article
Trend of Smart Cities is set to drive urban development for the next decade and will drive demand for response, storage, multienergy networks, smart devices, and new business models.
The Untold Challenges of Designing Smart Cities Designing smartness into cities requires some major infrastructure upgrade; in a sense we are constructing the
brain of the city. There is huge pressure on the Indian government to build new and smart cities. Every minute, 20 Indians move into cities. India’s urban population will increase by 140 million in 10 years and 700 million in four decades. To avoid total collapse of the urban environment, India has to build new smart cities and re-engineer the old ones. The biggest challenge in building a smart city is adequate availability of the required skills in the labor force which is necessary requirement for sustainability of a Smart City. Cities worldwide are inherently broke and governments historically don’t want to interfere too much with cities, the result being that there is very little financial support to making smart cities happen. . Security and privacy will be one of the biggest challenges that the builders of country’s first smart city. Also, www.epcworld.in
there is the time factor such cities can potentially take anything between 20 and 30 years to build.
Smart cities to soon become a reality in India With the announcement of the easing of the rules for foreign direct investment in the construction sector the future of Smart Cities seems positive. The move will facilitate overseas capital to invest in building homes, offices and shopping centres in Asia’s third-largest economy. But one has to consider that mere investments in enhancing the infrastructure may not be enough to address the challenges being faced by the existing cities in face of the urbanization trend sweeping across the country. The need is to have a holistic approach towards development so as to make it not only economically viable but socially equitable and environmentally sustainable as well. And this is where the concept of smart city comes in, which when accomplished, will not only have addressed the infrastructural challenges being faced today by the existing cities more equitably, but would also provide facilities like Intelligent transport and mobility system, traffic and parking management, Cyber security, E-learning and digital transformation of the education system, Use of technology in healthcare delivery and Telemedicine, Energy efficient building structures, rise in employment etc. If India is to produce smart cities of international standards, it has to judiciously invest in the right kind of technologies. It is only then can we create cities that are not only smart, but also sustainable and efficient. And this can only be achieved if public and private bodies join hands and work towards a common goal. About the author: “People will know you for what you’ve done, not for what you plan to do” - With that as a philosophy, Gaurav K Shah, Director, Marketing and Sale, Ravi Group, has attained several targets at a very young age of 22. He started assisting his father, Ketan Shah, from the time while he was still studying. Subsequent to his graduation, Gaurav K Shah demonstrated ardent interest in the family’s real estate business. By means of proficiency in the real estate sector the company has seen a positive revolution in terms of implementing modern methodology keeping the base and foundation of the company intact.
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Report
Real Estate
Housing segment stabilizing & office market recovering in Hyderabad
In its latest report Knight Frank finds that housing segment in Hyderabad is gradually stabilizing and office market has witnessed the lowest level in absorption since H1 2014. However, office market is on the path of recovery.
K
night Frank India recently launched the third edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the residential and office market performance of Hyderabad for the period Jan- June 2015 (H1 2015).
Findings on residential side The report with regards to residential arena observes that Hyderabad has witnessed the lowest number of launches amongst all Indian markets. Apart from this, the city also witnesses lowest sales except Kolkata. The report also said that Premium market hit hard by slowdown, will require over 2 years to offload unsold inventory and new launches adding up on the pressure. One of the interesting findings of the report is, west Hyderabad holds the highest unsold inventory and yet remains the one of healthiest markets. On the other hand, North Hyderabad emerged as the most affordable market and this mainly due to lack of infrastructure development. Speaking about the findings, Vasudevan Iyer, DirectorHyderabad, said, “While there is a drop in residential launches and absorption levels are also low, the scenario is bound to
Hyderabad Residential Market Trend
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change soon with the recent RBI rate cuts, infrastructure development with metro connectivity and further impact of the political stability.” He also adds, “The office market is experiencing an unsettled scenario with demand in place but scarcity of supply. The increase in demand, declining supply, falling vacancy, lacklustre absorption and strengthening of rents shows consolidation of the office market but question remains as to how we retain and handle the momentum”.
Observation on office market According to the report, Hyderabad office market is witnessing the lowest level in absorption since H1 2014. And dwindling office space and unfulfilled demand drive the rental growth. The share of other services sector comprising of Healthcare and e commerce companies equals IT/ITeS. It has been seen that abject scarcity of good quality office space limited overall absorption numbers and forced occupiers towards the peripheral markets. The report also finds that Gachibowli, Madhapur and Manikonda are the most preferred locations and have witnessed hike in rentals and occupier interest.
Office New Completions and Absorption
BIG 5 Construct
Offering right platform for Building and Construction sectors The third edition of Big 5 Construct India has all set to surpass its previous records in terms of numbers of exhibitors, country pavilions, visitors etc. Over the years the exhibition has emerged as one of the most important events in the arena of building, construction and infrastructure sectors.
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he 3rd international building and construction event promises to be bigger and better than its previous editions as it brings hundreds of innovative products, solutions and educational program together. The Big 5 Construct India is the most focused international exhibition and conference for building, construction and infrastructure industry which brings together 8,000+ professionals for business, learning and networking. Taking place on 10th, 11th and 12th September at Bombay Exhibition Centre, Goregaon (East) in Mumbai, the event offers actionpacked 3 days with latest technologies and solutions on display along with jam-packed technical sessions, workshops along 80 u EPC World u August - 2015
with panel discussions, Q&As and much more. With a large variety of products, solutions and technologies on display, the exhibition is particularly beneficial for architects, engineers, builders, contractors, consultants, interior designers, procurement heads, infrastructure companies and all kinds of building and construction professionals who use building materials, equipments and related technologies. As part of construction industry, one must attend The Big 5 Construct India, if one is keen to see new materials, equipments or find new suppliers, or even partner with leading international brands exhibiting at the show. Apart from this, the event helps people continue their learning by attending free workshops and educational events co-located with the show.
Preview
The organisers Organised by Federation of Indian Chambers of Commerce and Industry (FICCI), co-organised by Ministry of Urban Development of India in co-operation with dmg events, the event is sponsored by Astral Pipes, Asahi India Glass, Birla White Cement and Center for Development of Stones (CDOS). The Big 5 Construct India has also garnered support from apex bodies like Indian Institute of Architects (IIA), Council of Architecture (COA) and Builders Association of India (BAI) whose members will be attending the event. The exhibition and all educational events are free to visit.
About the last edition The last edition of The Big 5 Construct India proved to be resounding success with over 200 exhibitors from 25 countries occupying 4,500 sqm of floor space showcasing new and innovative construction products. It also saw the launch of a range of free to attend educational events to add value for both visitors and exhibitors. Alongside the exhibition, the exclusive, inviteonly Platinum Club ensured the attendance of over 200 of India’s most influential contractors, architects and consultants working on the country’s largest and most inspiring projects. In total, The Big 5 Construct India welcomed 5, 279 unique visitors from the construction industry, and increase of more than 12% from the previous year. With Massive infrastructure and building projects www.epcworld.in
Importance of the event • The event offers the construction sector to meet and connect with who’s who of building and construction sector decision makers attending from India, South East Asia, Middle East and Europe. • Offer end-to-end Solutions from building materials to stones, marbles and floorings, from PEB, steel and interiors to cement, glass, piping and IT solutions – explore & source from 250+ represented brands. • Visitors can get international flavour with 15+ countries participating and pavilions from Germany, Turkey, Italy, UK, China, Korea, Malaysia, UAE and many more nations. • Action-packed 3 days with jam-packed technical sessions, workshops on LEED v4 rating system, Advanced Project Management and IGBC Green New Building (NB) rating system along with panel discussions, Q&A’s and much more. • Facilitate to exchange opinions, views and ideas, and help keep one’s knowledge and skills up to date. Meet new suppliers and potential employers.
planned the construction industry is set to grow by 9% in the next 5 years, India continues to provide suppliers of construction products and services with unparalleled opportunities. Next year’s event is guaranteed to be bigger and with more new educational content to attract eve more buyers. 81
NATIONAL 6th World Renewable Energy Technology Congress
Renewable Energy India Expo
CII EXCON
Sustainable Smart Cities India
Watertech India 2015
WIN India
The Big 5 Construct India 2015
Express Logistics & Supply Chain Conclave
IME 2016
Intersolar India
Oil & Gas World Expo 2016
Date: 21 - 23 August 2015 Venue: NDCC, New Delhi Industry: Renewable Energy www.wretc.in
Date: 03 - 04 September 2015 Venue: Vivanta by Taj, Bengaluru Industry: Urban Development www.nispana.com/ssci
Date: 10 - 12 September 2015 Venue: Bombay Exhibition Centre, Mumbai Industry: Construction www.thebig5constructindia.com
World of Metal
Date: 13 - 15 September 2015 Venue: Bombay Exhibition Centre, Mumbai Industry: Construction www.wom-expo.com
Date: 23 - 25 September 2015 Venue: India Expo Centre, Gr Noida Industry: Renewable www.ubmindia.in/renewable_energy
Date: 29 - 30 September 2015 Venue: Le Meridien, New Delhi Industry: Water www.watertechindia.com
Date: 29 - 30 September 2015 Venue: Taj Lands End, Mumbai Industry: Logistics www.elscconclave.com
Date: 18 - 20 November 2015 Venue: BEC, Mumbai Industry: Renewable www.intersolor.in
Date: 25 - 29 November 2015 Venue: BIEC, Bangalore Industry: Construction www.excon.in
Date: 09 - 11 December 2015 Venue: Pragati Maidan, New Delhi Industry: Automation www.win-india.com
Date: 24 - 27 February 2016 Venue: Salt Lake Stadium, Kolkata Industry: Mining www.internationalminingexhibition.com
Date: 03 - 05 March 2016 Venue: Bombay Exhibition Centre, Mumbai Industry: Oil & Gas www.chemtech-online.com
INTERNATIONAL InterSolar South America
PV Korea
Buildtech 2015
The Turkey-Eurasia Mining Show
RENEXPO
International Mining and Resources Conference
Date: 01 - 03 September 2015 Venue: Expo Center Norte, Sao Paulo, Brazil Industry: Energy www.intersolar.net.br
Date: 08 - 09 September 2015 Venue: Conrad, Istanbul, Turkey Industry: Mining www.terrapin.com
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Date: 09 - 11 September 2015 Venue: KINTEX, Goyang, South Korea Industry: Energy www.exposolar.org
Date: 01 - 04 October 2015 Venue: Augsburg, Germany Industry: Energy www.renexpo.de
Date: 07 - 10 October 2015 Venue: Putra World Trade Centre, Kuala lumpur, Malayasia Industry: Construction www.tradelink.com.my
Date: 10 - 12 November 2015 Venue: Convention & Exhibition Centre, Melbourne, Australia www.imarcmelbourne.com www.epcworld.in
Spotlight
Concrete Equipment
Putzmeister launches the ultimate Batching Plant MT - 1.0. Putzmeister announced the launch of its Batching Plant, the MT – 1.0., with a capacity of 60 m3/h. As an in-house development the R&D team has made sure that, it stands apart with respect to design and in-built features.
German Technology – Make in India! The acknowledged world leader and global supplier of concrete machines, PUTZMEISTER has its operations in all major countries of the world. As a pioneer of research and development in concrete pumping technology, PUTZMEISTER offers the latest and the most comprehensive range of concreting solutions. With the support of its parent company in Aichtal, Germany, PUTZMEISTER India has developed advanced technologies and high quality services in India with its base at the Verna Industrial estate, Goa. With a country wide sales and service network and regional and local offices all over India, PUTZMEISTER delivers perfect 84 u EPC World u August - 2015
concreting solutions to the industry. It also offers competent advice, customised concepts to its clients, and imparts training on all aspects of concreting technology. Putzmeister machines are working for construction of various prestigious projects like Metro rail projects, expansion and modernization of International airports at Mumbai, Delhi, Kolkata and Bangalore, construction of various power plants, Hydro-electric projects, LNG tanks, refineries, ports, roads, bridges and other various high rise building projects. This July PUTZMEISTER is performing 275m in vertical pumping capacity at the L&T OMKAR WORLI Project in Mumbai thanks to the stationary pumps BSA 14000 and BSA 2110HPD. This is just a small glimpse of many outstanding accomplishments.
Spotlight
Concrete Equipment
Mixing Technology at its Best Another recent accomplishment is the long anticipated launch of its very own Batching Plant, the MT – 1.0. Developed completely in-house, PUTZMEISTER made sure that it stands apart with respect to design and in-built features, which has been exclusively adapted for the Indian market. The MT – 1.0.being characterized with high productivity, functionality, easier operation and maintenance in order to meet the highest standards of the commercial RMC’s, infrastructure developers, contractors and many more of India’s dynamic construction industry.
High Tech Features in order to create value for money The MT - 1.0 offers the highest of all standards and features in regard to the operation and maintenance of the Plant on a day-to-day basis. For example the Easy Drive Through for trucks and the Easy Access to the Tower – these features clearly ensure safety and productivity. Most structures in the market do not have the width to offer an Easy Drive Through for the trucks. The MT – 1.0 offers a wider frame of the support structure and hence ensures the Truck Mixers need not drive in reverse mode, which guarantees an optimum output of the plant and a great amount of saving time.
Twin Shaft Mixer - Fastest Maximum Mix Quality Moreover the MT – 1.0. makes sure there is a consistent homogenous mixture in every batch with shorter mixing cycles. This ensures that the customer’s project can run at its full capacity from day one. A robust design has been put in place for the toughest operating conditions known in the Indian terrain. The plant is not only easily accessible for the maintenance team, but it also creates value for money over the long run as there is less wear compared to the Pan or Planetary mixers which have been introduced to the Indian market.
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Ensuring smooth run A central lubrication system that injects grease at regular intervals to the shaft seals of the mixer, ensures that the machine runs smoothly at all times, thus providing hassle-free, automated maintenance to the heart of the batching plant.
Top weighing system for an optimum capacity Weighing or control issue is completely taken care of by a calibration system for cement, water and fly ash, ensuring and making it an easy task so that the MT – 1.0. Batching plant is operating accurately at all times.
Fully Computerized - Software Last, but not least PUTZMEISTER has integrated the option of a remote operation of the plant through using a tablet. In short, this means the future and proud owner, as well as the operator of a PUTZMEISTER Batching Plant, MT – 1.0. can lean back and enjoy the following digital features Plant monitoring through ‘App’ • Preventive maintenance schedule and interlocks • System generated calibration chart More benefits at a glance • Availability of more maintenance and working space • Skip and discharge gate lined with wear plates for extra life • Possibility to increase aggregate storage capacity when required • Availability of Skid frame for mobile application • A calibration system for cement, water and fly-ash makes weighing or control error free The company has always believed that the customer’s voice needs to be heard and with the Batching Plant, MT – 1.0. PUTZMEISTER has made sure to address all worries of todays’ construction equipment owners. The company is now looking forward to a prosperous second half of year 2015, many clients have already anticipated this launch and eagerly looking forward to be a proud owner of the Ultimate Batching Plant, Made by PUTZMEISTER, Make in India.
Advertisers' Index
Company Name
Page No.
6th World Renewable Energy Technology Congress.........www.wretc.in......................................................... 89 9th Edition Design Mission India........................................www.designmissionseries.com............................. 73 9th Express Logistics & Supply Chain Conclave................www.elscconclave.com......................................... 97 Apollo Inffratech..................................................................www.apolloinffratech.com..................................... 45 Bentley Connection Event..................................................www.connection.bentley.com/mumbai.................. 29 Dassault Systems . ..........................................................www.3ds.com ....................................................... 3 ElectroMech Material Handling Systems . .........................www.emech.co.in.................................................. 39 Electrotherm ......................................................................www.electrotherm.com.......................................... 41 ESSAR Projects . .............................................................www.essarprojects.com................................... IBC EXCON 2015......................................................................www.excon.in........................................................ 51 Gandhi Automations ..........................................................www.geapl.co.in.................................................... 17 Grace Castings . ................................................................www.gracecastings.com........................................ 98 InterSolar India 2015..........................................................www.intersolar.in................................................... 95 KIRBY Building Systems ...................................................www.kirbyinternational.com....................................11 Larsen & Toubro ................................................................www.larsentoubro.com............................................ 5 Macons Equipments . ........................................................www.macons.co.in................................................ 53 Power Build . ....................................................................www.pbl.co.in..................................................... BC Prince Pipes & Fittings ......................................................www.princepipes.com........................................... 69 Renewable Energy India Expo 2015..................................www.ubmindia.in/renewable_energy..................... 83 STIHL India.........................................................................www.stihl.in........................................................... 59 STP ...................................................................................www.stpltd.com..................................................... 79 Tata BlueScope Steel ........................................................www.tatabluescopesteel.com................................ 15 Tata Projects.......................................................................www.tataprojects.com........................................... 13 The Big 5 Construct India 2015..........................................www.thebig5constructindia.com............................ 49 UltraTech Cement ............................................................www.ultratechconcrete.com.............................IFC Union Bank Of India...........................................................www.unionbankofindia.co.in.................................... 7 Universal Construction Machinery & Equipment ...............www.uceindia.com................................................ 19 VE Commercial Vehicles ...................................................www.eicher.in.......................................................... 9 WaterTech India 2015.........................................................www.messefrankfurt.com...................................... 87 WIN India 2015...................................................................www.win-india.com................................................ 85 Wirtgen India......................................................................www.tekla.com...................................................... 21 World of Metal 2015...........................................................www.wom-expo.com............................................. 91 88 u EPC World u August - 2015
News & Products
Gandhi Automations offers boom barriers in innovative shapes
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andhi Automations offers a wide range of models in automatic boom barriers which are reliable and maintenance free. The models are available for boom length up to 8m to suit various applications like car parking sites, condominiums, toll collection & industrial entrances. It is highly compact in size with an extremely silent operation. The soft edges, rounded corners and high performance of the boom barriers offered by the company are suitable for any type of installation environment. The newly
designed and technologically advanced boom barrier is an ideal solution for a totally safe access control to high transit environments such as hotels, banks, shopping malls, as well as blocks of flats, companies and camp sites ensuring their use to authorized people only. The pickled, metallic color painted sheet metal does not degrade with time, despite adverse weather conditions, and gives the boom barrier a clean look. The key operated lever release system can be promptly accessed from the inspection side; fitted with a cover plate, the system can safely handle all emergencies in case of power failure. The top structure has a provision for an aerial to be installed to avoid any vandal attacks. The new cabinet features large dimension, to cater for the need for greater sturdiness and convey stronger-impact aesthetics. The electronic panel is positioned on the top part of the barrier at a height that permits easier access to components and therefore allows conveniently carrying out setting and maintenance jobs. To ensure more visibility in the more demanding applications, the direct current version is fitted with an arm lighting kit: the LED goes off when the arm is up; it flashes when the arm is moving and is continuously lit when the arm is down, in order to enhance its outline.
Punj Lloyd wins ` 477 crore Ennore LNG tankage project from Mitsubishi
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unj Lloyd group has won a ` 477 crore tankage order from Mitsubishi Heavy Industries ltd of Japan. The scope of work entails confirmatory geotechnical investigation, early earth works, construction of two 180,000 m3 capacity full containment LNG Tanks on elevated piled foundation for LNG import, storage and re-gasification terminal project of Indian Oil Corporation at Ennore port in Tamil Nadu, India. Once completed, the LNG imported to the Ennore terminal will be used by utility company power generation plants as an alternative fuel and as feedstock by fertiliser plants.To be completed in 33 months, the project timelines are extremely challenging. However the expertise of the company in tanks and terminals, especially cryogenic tanks 90 u EPC World u August - 2015
is well established. The company had constructed the LPG Import-Export terminal at Ennore for its client, IndianOilPetronas.The company was also involved in the construction of three of the four LNG terminals of the country - namely Dahej, Hazira and Dabhol. LNG is stored at -160 degrees C in liquid form and when transported through pipeline it is re-gassified into natural gas. With this win, the Group’s order backlog reaches ` 22,171 crores. The order backlog is the value of unexecuted orders on March 31, 2015 plus new orders received after that date. The company’s president, Atul Jain said that they are proud to be India’s first LNG tank constructor for both the Western and Eastern Coasts, having played a critical role in building India’s LNG infrastructure.
News & Products
Gujarat Apollo Industries’ world class crushing plants
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ujarat Apollo Industries Ltd, one of the largest manufacturer of road construction equipment in India for over four decades producing paving & compacting equipment, asphalt & wetmix macadam plants; crushing, screening & recycling plants and other ancillary equipment. The company’s crushers are based on proven German technology. German engineering provided by Apollo Machinenbau GmbH, combined with quality manufacturing and customer orientation of the company in India, makes a
formidable combination. Crushers and crushing plants are designed incorporating latest technological developments in the field. Continuous improvement in quality and up gradation of technology has been the key to the company’s success and an enviable customer base. Proven design and technology with state of art automatic controls, the company’s crushers and crushing plants are engineered to perfection. Standard bought outs, precision engineering, quality processes and procedures coupled with correct designing of plants by experienced personnel ensures reliable and complete crushing solutions. Quality processes and systems incorporated in the company’s crushers ensure reliability in operations, high uptime and phenomenally high quality output translating into productivity and returns to the customer. The company’s primary and secondary horizontal shaft impactors ensure cubicalshape of aggregates, with simple operation, low capital cost with easily available spares. The range also includes crushers for concrete recycling. The company’s range includes single toggle primary jaw crushers, primary impact crushers, secondary impact crushers, cone crushers, vertical shaft impact crafters and vibrating screens.
New load planning & route optimisation features in Kale's Helios
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ale Logistics Solutions has added automated load planning & route optimization functionality to its web-based application, HELIOS- transportation & fleet management system. The functionality will help its clients optimize their vehicle utilization, delivery time and customer satisfaction levels in turn.Vehicle load planning, routing and scheduling are critical decisions in a transportation cycle. Effective load planning can help transporters reduce fuel usage, improve vehicle safety and speed. The load planning module offers the transporter a comparison between order volume and vehicle resources available. A plan gets created based on best recommended combination and the transporter chooses most optimised plan for delivery. The route optimisation function within the system helps plan the best 92 u EPC World u August - 2015
route plan factoring shortest route and en-route expense and prompts the transporter/driver of which route to take first on a multiple delivery route like in case of a milk run. A completely automated load planning & route planning function in the TMS helps control the expenses, prevent delivery delays and avoid cumbersome co-ordination with customer and drivers. The transporter also saves both time and money by planning a load that matches each vehicles schedule making offloading at each delivery destination a quicker process. The new feature in the system provides the management a dashboard view of vehicle utilization levels and helps improve efficiency of overall transportation cycle which in turn encourages customer satisfaction as the load reaches them in time and in the condition that they expect.
News & Products
KEPL to supply locally developed API steam turbine to IOCL
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irloskar Ebara Pumps Limited (KEPL), a sister concern of Kirloskar Brothers Limited has successfully completed the testing of indigenouslydeveloped API Steam Turbine ‘K-TUR’, which is being supplied to Indian Oil Corporation Limited, Vadodara facility as a driver for the boiler feed water pump. The test was conducted at KEPL Kirloskarvadi works in Maharashtra. The test on this 340 kW steam turbine was conducted in accordance with the API 611 specifications. No Load Mechanical Run Test (NLMRT) is an hour long test of the steam turbine where the steam machine is run at its rated speed (measured in rpm i.e. revolutions per minute) and various parameters are monitored before the turbine is dispatched to the customer.K-TUR is among the most efficient single-stage steam turbines and is currently, available
in three frames. The first one KT-B is for the power requirements up to 1 MW and the second frame KT-D is for the power requirements up to 3 MW. These K-TUR Drive Turbines are also available in Condensing and Back Pressure Configuration. The third frame KTBH is a high back pressure variant of the model which can generate powers up to 2200 kW. Managing Director of the company, Aseem Srivastava said that the company has developed K-TUR through its inhouse capability and R&D programme. He said that they are delighted to provide indigenously developed product to IOCL. The company products carry its core value i.e. reliability and the machine are being built of the breakthrough technology being developed under the Make in India drive. With this supply, the company has successfully put another foot forward in supporting the initiative.
Allcargo Logistics expands its senior leadership team
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llcargo Logistics Ltd has announced the expansion of its senior leadership team through the addition of two industry veterans, PrakashTulsianias the Chief Operating Officer and Executive Director (Operations) and Martin Muller as the Chief Commercial & Strategy Officer. This announcement is in line with Allcargo’s strategy to consolidate its leadership team.With degrees in Law and Commerce, Tulsiani is a Chartered Accountant and a Company Secretary. He brings with him over three Mr. PrakashTulsiani - Chief Operating decades of experience and expertise in scaling businesses and expanding services. Prior to Officer and Executive Director joining Allcargo, Tulsiani was serving as the Managing Director of Gujarat Pipavav Port. (Operations) Martin will be in charge for developing a strategic growth roadmap for the organization globally and expand its leadership in existing markets. He started his career after graduation with a Master in Business Administration from the University Of St. Gallen Switzerland. He was a former consultant of McKinsey & Company. He specializes in strategic growth of organizations with his experience across Europe, APAC, Middle East and other regions of the world. Martin comes with enriched experience in the logistics industry, having been associated for several years in serving companies like DHL Global Forwarding. Allcargo’s founder and chairman, Shashi Shetty said that they have always aimed at setting new standards and benchmarks of service quality as well as creating the best team of experienced professionals. The unique virtue of their organization has led to their global leadership in the logistics space and winning the trust of their valued customers. 94 u EPC World u August - 2015
News & Products
Robbins announces crossover series of TBMs
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obbins has announced its crossover series of TBMs, a line of field-tested, rugged dual mode-type machines. Crossover TBMs feature aspects of two TBM types, and are ideal for mixed ground conditions that might otherwise require multiple tunneling machines. The XRE (standing for crossover rock /EPB) is the most common type of hybrid machine, and features characteristics of single shield hard rock machines and EPBs for efficient excavation in mixed soils with rock. An XRE TBM recently completed tunneling at Australia’s Grosvenor decline tunnel, where it excavated two mine access drives at rates fourteen times faster than a traditional roadheader. The latest drive was completed on February 9, 2015. Additional types of crossover machines
include the XSE (Crossover between Slurry/EPB) and the XRS (Crossover between Rock/Slurry) TBMs. The Crossover series is quickly gaining in popularity, with Robbins Crossover TBMs currently being assembled in Mexico, Turkey, and Azerbaijan. An XRE TBM will begin excavation for Mexico’s TúnelEmisorPoniente II (TEP II) later this year, while an XSE is being readied for excavation at the Baku Metro. Lok Home, Robbins President, said that this is a big step forward for the mine to appropriately use civil tunneling technology for a mining application. The crossover technology helped them finish the project on schedule. The rebranding and Crossover terminology embodies the concept that the machines are able to cross over between modes, said Home.
Tata Power club Enerji and Tata ClassEdge collaborate to guide students
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lub Enerji which has been working towards spreading the message of conversation of energy & resources has joined hands with Tata ClassEdge to create a module titled ‘Conversation and Civil Sense’. The module is targeted at students and will be accessible to schools. It includes material on energy and resource conservation as also on conservation of civic and moral values and guiding students towards becoming responsible citizens. The collaboration is built upon reinforcing its contribution towards nation building. ClassEdge provides teachers the support required to make classroom learning a holistic and enjoyable process. They are supported by a robust instructional design model which is known as the multiple learning experiences model (MLEx™) multimedia and other material that are tagged at different levels. 96 u EPC World u August - 2015
Since its inception, ClassEdge has become a trusted partner to over 1200 schools across India.Over the last few years, Tata ClassEdge has introduced a series of innovative offerings which include GameEdge, LabEdge, TestEdge and PlanEdge— covering academic planning, assessments, virtual labs and gamification. Most recently, the firm also released ClassEdge Connect, a collaborative platform for teachers to share resources and teaching ideas across schools.The Club Enerji initiative has been contributing extensively towards a brighter and greener tomorrow by undertaking several successful initiatives. The savings of 14.2 MUs of electricity is equivalent to saving 14,200 tonnes of CO2 and is enough to light up over 6,943 houses for a year. The initiative has further sensitized approximately 9.3 million citizens across 11 locations.