CW lists 40-odd industry bigwigs who were in the news in 2015, and connects with some of them to get up to speed on their progress.
The year 2015 started with an informal assessment of the performance of the Narendra Modi government, which announced a host of initiatives such as upping the ´ease of doing business´ quotient in India, Make in India, Digital India, Smart Cities and Housing for All. A further trigger was the Union Budget, with an overall increase of Rs 70,000 crore in investment in infrastructure in 2015-16, with an increase in the allocation for roads and railways by Rs 14,031 crore and Rs 10,050 crore, respectively. Although the Budget was a good indicator of the intent, the devil lay in execution.
The roads sector was the first to get into higher gear with a slew of EPC projects being awarded. Minister for Roads Nitin Gadkari has proven to be a dependable ally for the construction sector owing to his dogged determination in resolving issues afflicting progress. The roads sector was closely followed by contract mining, irrigation and power. However, in a year-end analysis, aggregate sales, operating profit and net profit of over 300 companies from core sectors fell in the September 2015 quarter, making it the third consecutive quarter with a dismal performance. Half the operating profit was spent on servicing debt, indicating pressured balance sheets. Companies are weighed down under a $640 billion debt burden, over 30 per cent of India´s GDP. The strain lies in the stressed debt of over $50 billion in the banks and a rise in bond defaults.
That said, June 25, 2015, will be remembered as a red-letter day in the history of urban India with three mission programmes with a huge spend being launched: Smart Cities, AMRUT and Housing for All. In months, the Ministry of Urban Development released a list of 98 nominated cities, with two cities yet to apply. And, now we wait for the shortlist of the first 20 cities.
Amid all these hi and lows, there were some achievers who kept moving forward, persistent and committed, propelling their company and the industry ahead. We call them ´Newsmakers´. CW identified 40-odd personalities throughout the year who stood out as our newsmakers - read on and we´ll tell you why.
For starters Behind-the-scenes man Hasmukh Adhia, Revenue Secretary, took centre-stage as he chaired a meeting to find solutions for almost 1,400 stalled projects.
Ravi Uppal, Managing Director & Group CEO, Jindal Steel & Power Ltd (JSPL), had his company commission the country´s largest billet caster plant at Angul in Odisha, that too within a record time of one year.
Vijay Chhibber performed brilliantly as Chairman, NHIDCL, as the company invited its first tender for its road project in Arunachal Pradesh at about Rs 273 crore.
UK Sinha, Chairman, SEBI, relaxed norms for conversion of the distressed loans of listed companies into equity by banks and financial institutions - a helpful step to help contractors reduce their debt load.
Anil Chaudhry, Country President and Managing Director, Schneider Electric India, flagged off the Schneider Electric ´Energy and Automation Yatra 2015-16´, a six-month road show, in line with Make in India and Digital India.
Social activist and politician Anjali Damania first raised an alarm about a dam over the Balganga river in Raigad district, hinting at a scam. Maharashtra´s Anti-Corruption Bureau further found irregularities of Rs 926,342,110 in the project.
Essar Projects JV with Italy´s Saipem SpA won a $1.57 billion order from Kuwait National Petroleum Company for setting up Al-Zour Refinery Project, Kuwait´s biggest development project. This won applause for Shiba Panda, Managing Director & CEO, Essar.
Technical Education and Industry Minister, Punjab, Madan Mohan Mittal made a huge impact as the state government decided to offer training to over 100,000 youth in the construction industry to help them find employment in GCC countries.
Easing of FDI norms made Amitabh Kant, Secretary, Ministry of Commerce & Industry-Department of Industrial Policy & Promotion, and his ministry heroes to the industry.
And, there are many, many more. CW takes you through our entire list, along with featured interviews with a few of them.
The smart act
Smart is the new buzzword in India with the government´s smart cities initiative being bolstered by civic bodies, local authorities and development companies. The Ministry of Urban Development (MoUD) has been playing a vital role in the development of smart cities. And in 2015, three people stepped forward to play their part in urbanising India. Madhusudhan Prasad, Secretary, MoUD; Praveen Prakash, Joint Secretary, MoUD; and Sameer Sharma, Additional Secretary, MoUD, took over a newfound set of responsibilities, which include delving deeper into aspects of building and infrastructure for the development of smart cities.
Meanwhile, Urban Development Minister Venkaiah Naidu is playing the role of a leader and motivator to urge states and urban local bodies to rise to the smart challenge. He released the list of 98 cities to be developed as smart cities, which together have a population of 13 crore, accounting for 35 per cent of India´s urban population. States have responded to his clear vision - that smart cities need smart people - and are eager to recast the country´s overall urban landscape.
In 2015, India also welcomed one more city to its family, giving Andhra Pradesh its new capital: Amaravati. Much of the credit goes to Andhra Pradesh´s Chief Minister Chandrababu Naidu who has unveiled a precise vision of a grand capital that will match the world´s leading cities and be smart, green and sustainable.
Many city planners and developers have also set themselves on the smart march. A Request for Proposal (RFP) was released for turning Mumbai´s Bandra-Kurla Complex (BKC) into a smart financial district. Sanjay Sethi, Additional Metropolitan Commissioner-I and Project Director, MUTP, Mumbai Metropolitan Region Development Authority (MMRDA), has been working towards achieving the smart vision and set up the International Financial Services Centre at BKC. Both these projects aim to build Smart BKC 1.0. With RFPs received, the smart project is all set to go live by October 2016; if Sethi hits bull´s-eye, he could be successful in transforming BKC into the country´s first smart business district.
Another man on a smart mission is Shikhar Agarwal, Commissioner, Jaipur Development Authority (JDA), who aims to make Jaipur a smart city. He took over the reins at JDA in 2014 from his previous position as director general (employment and training), Ministry of Labour and Employment. And, while the city´s plan has been submitted as part of the Smart Cities Challenge, Agarwal has already actioned smart moves for the Pink City. It will indeed be interesting to watch erstwhile Rajput charm juxtaposed with cutting-edge innovation.
Also eyeing the smart opportunity is Peter J Davoren, President & CEO, Turner Construction Company. Upbeat about the proposed 100 smart cities, the project management company is looking at expansion in Bengaluru, Hyderabad and Visakhapatnam.
According to a recent announcement, OP Puranmalka, Managing Director, UltraTech Cement, will retire on March 31, 2016; he will continue as a non-executive director and KK Maheshwari will take over as managing director. As we bid farewell to Puranmalka, we must applaud his leadership skills that enabled the company to make some progressive decisions in 2015. UltraTech acquired cement units from Jaiprakash Associates in Madhya Pradesh at Rs 5,400 crore, which will enable the company to boost capacity by 2 million tonne. Puranmalka´s entrepreneurial abilities include initiatives such as brownfield expansion and new captive power plants and acquisitions.
For some companies, a new focus proved to be the way forward. JSW Cement, part of the $11 billion JSW Group, entered the RMC business and announced plans to further boost capacity by starting clinkerising units in three more cities with total investments of around Rs 5,000 crore over a period of five years. Anil Kumar Pillai, Director and CEO, JSW Cement, wants to build the brand with environment-friendly products in this competitive market, where slag cement can play a major role (read interview on page 62). JSW Cement aims to become a Portland slag cement manufacturing company soon; under Pillai´s guidance, expansion and growth are just a step away.
Metro and rail transportation
Vinayak Deshpande, Managing Director, Tata Projects, worked to ensure that the company remains an integral part of the Dedicated Freight Corridor project (read interview on page 59). After having won a 350-km stretch in the Eastern Dedicated Freight Corridor, the consortium led by the company bagged the contract for two phases of the Western Dedicated Freight Corridor (WDRFC) this year. WDRFC runs from Dadri in Haryana to Jawaharlal Nehru Port Trust (JNPT) in Maharashtra with the entire Rs 3,000 crore project funded by the Japan International Cooperative Agency (JICA).
While the railways made news, the metro rail was not far behind.
Mukund G Sapre, Executive Director, IL&FS Transportation Networks Ltd (ITNL), took the company to the next level. ITNL managed to emerge as a preferred bidder for a few projects, including the Rapid Metrorail Gurgaon South Ltd. With 45 per cent of execution works achieved, the project is likely to be completed by December 2016 (read interview on page 60).
The Hyderabad Metro had a mixed bag of a year. All eyes were on VB Gadgil, Chief Executive and Managing Director, L&T Metro Rail (Hyderabad), as the first 8 km from Nagole and Mettuguda was expected to become operational in 2015. However, the wait remained for various reasons (read interview on page 56). Nevertheless, work on one of the world´s largest projects under PPP has been progressing rapidly. What´s more, Gadgil envisions a Metro with the technology to enable regeneration of power up to 40 per cent.
The real estate sector found cheer with the Union Cabinet recently approving the Real Estate (Regulation and Development) Bill, 2015 (read more on the Bill on page 117). Otherwise, for the past few years, the sector had been groaning under the burden of unsold stock, exorbitant prices and lack of financing. Despite the slowdown, some stakeholders still made headlines with unique business models, strategies and moves. Maharashtra Chief Minister Devendra Fadnavis is clearly playing his part in remaking the state. Early last year, he announced that his government and authorised agencies will give approvals for residential projects within seven days of receiving proposals from builders. He approved the new Cluster Redevelopment Policy for Mumbai and continued to push forth with his Make in Maharashtra plans. The success of Saifee Burhani Upliftment Trust, ably led by Abbas Master, CEO, was testament to this (read interview on page 63). Within 10 days of meeting Fadnavis, the 100 year-old Bendi Bazaar renewal plan received the IOD (Intimation of Disapproval) for the first phase. This has brought Master and his team to the spotlight as well; they have been relentlessly working towards quick expedition of what is touted to be India´s largest cluster redevelopment project since 2009 in various spheres.
Cracking one of the largest deals in the real-estate sector in recent times was Shrikant Bhasi, Chairman, Carnival Group. He acquired a commercial real estate project, which includes Elante Mall, Hyatt luxury hotel and office premises with a central courtyard in Chandigarh, from L&T Group at a deal value of Rs 1,785 crore (read interview on page 60).
After having attracted major industrial development to the once-barren land near Chennai, Ravindra Babu Sannareddy, Managing Director, Sri City, revealed his plans to bring in soft infrastructure in the township, and increase the current 100 houses to a total of 600.
And whisper had it that Italy´s Agnelli family, which holds 81 per cent of Cushman & Wakefield Inc, has decided to sell its stake in the firm. This put the spotlight on the various heads of the firm representing different countries. For India, the man was Sanjay Dutt, Executive Managing Director, Cushman & Wakefield, South Asia, who also spearheads the growth strategy for other South Asian markets including Sri Lanka, Bangladesh, Nepal and Pakistan.
Further, an MoU was signed between Google and Telangana for the IT major to set up its biggest campus of Asia in Hyderabad by investing about Rs 1,000 crore. Construction is likely to commence in the summer of 2016. Jayesh Ranjan, Secretary-IT, Government of Telangana, and Vice Chairman and Managing Director, Telangana State Industrial and Infrastructure Corporation, Government of Telangana, is clearly on a mission to ensure that Hyderabad, the mecca of IT in India, retains its crown.
And in another move, Vinayak Deshpande, Managing Director, Tata Projects, signed an MoU with Brookfield Multiplex to develop social infrastructure in India, which will include commercial, retail, residential, healthcare, tourism and leisure projects across India. (read interview on page 59).
India´s construction equipment industry is poised for growth. Equipment players have been eyeing the market and gearing up to meet upcoming demand. This was evident at the recently head construction equipment exhibition in Bengaluru, Excon (read feature on page 84).
Vipin Sondhi, Chairman, Excon, and Managing Director & CEO, JCB India, is in complete support of the government´s Make in India campaign (read interview on page 50). This was evident in the theme of Excon this year and the company´s showcase of 25 made-in-India machines at the expo. Further, JCB India has also set up two plants ahead of the campaign.
While construction, mining and quarrying had a 10.5 per cent share in the GDP in the first half of FY16, the Indian Construction Equipment Manufacturers´ Association (ICEMA) projected that the industry will touch $5 billion by 2019-20. Eyeing robust growth, Volvo Eicher Commercial Vehicles (VECV) launched Pro 8031XM tipper and Pro 6025T box body vehicles.
Vinod Aggarwal, CEO, VE Commercial Vehicles, has been going full steam ahead, leaving behind the recession in the commercial vehicle industry (read interview on page 61).
Awards, appointments and longevity
As a famous saying goes, ´When your work speaks for itself, don´t interrupt.´ This held true for companies and people alike in 2015. In August 2015, Shapoorji Pallonji completed 150 years of existence, truly an impressive milestone. Shapoor Mistry, Chairman, Shapoorji Pallonji, the genius spearheading the infrastructure conglomerate, reportedly said he is ready to take on new opportunities.
Larsen & Toubro (L&T) and its leaders had more than one reason to celebrate. AM Naik, Group Executive Chairman, recently celebrated 50 years in the company, where he started as a junior engineer in 1965 û and what an innings it has been! Also, SN Subrahmanyan was appointed Deputy Managing Director and President, besides being the company´s Whole-Time Director (read interview on page 46).
Meanwhile, Sindhushree Khullar (who completed her tenure in December 2015) and Arvind Panagariya stepped up to the positions of CEO and Vice Chairman, respectively, of the newly formed NITI (National Institution for Transforming India) Aayog. Replacing the Planning Commission, NITI Aayog is chaired by Prime Minister Narendra Modi and will monitor and evaluate implementation of programmes and initiatives.
There was also good news for the National Highways Authority of India (NHAI), which was headless for nearly two years, as the position of full-time chairman fell vacant. Finally, Raghav Chandra has taken over as Chairman (read interview on page 48). Further, Amit Gossain was appointed as the new Managing Director of elevator and escalator company KONE India (read interview on page 58). And, Gaurang Pandya was elevated in UTC Building & Industrial Systems to head the Indian operations for the businesses of Carrier, Otis, Edwards, Chubb and Kidde.
Winning the Steel Minister´s Trophy twice, during 2007-08 and 2011-12, JSW Steel - spearheaded by Sajjan Jindal, Chairman and Managing Director, JSW - triumphed once again by receiving the Prime Minister´s Trophy for Best Integrated Steel Plant for 2012-2013. In another national achievement, the National Buildings Construction Corporation (NBCC) bagged the India Pride Awards 2015, which was received by Dr Anoop Kumar Mittal, Chairman and Managing Director, NBCC (read interview on page 52).
As we applaud all our newsmakers of 2015 for their achievements, we wish them and the entire construction sector a successful 2016.
- Shriyal Sethumadhavan
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Dr Anoop Kumar Mittal
Mukund G Sapre