Coronavirus, construction and coffee
ROADS & HIGHWAYS

Coronavirus, construction and coffee

Coronavirus has put the brakes on growth in several industries. But it has also pummelled the ‘Make in China’ story. China produces nine times the volume of steel that India does; 40 per cent of this is used in construction. Over a third of Chinese steel mills are considering cutting production ...

Coronavirus has put the brakes on growth in several industries. But it has also pummelled the ‘Make in China’ story. China produces nine times the volume of steel that India does; 40 per cent of this is used in construction. Over a third of Chinese steel mills are considering cutting production because of rising inventories. Owing to slow construction activities, the outlook for domestic rebar demand is negative. JCB UK has already cut its production as over 25 per cent of its components and parts suppliers have been affected, in turn disrupting its delivery and production schedules. Komatsu, which sources components from its own plants and outside partners in China, is shifting production of metal parts used in the body of vehicles as well as wire harnesses to Japan and Vietnam.Japan's Daikin Industries is considering moving the assembly of commercial air-conditioners to Malaysia. Just about 30 per cent of the nation's 183 auto assembly plants were online by end February, according to the China Association of Automobile Manufacturers. A lot of the disruption above provides a window to the Indian auto component industry to perk up its backyard. Most analysts believe it takes a lot to be part of the supply chain and as this is only a short-term event, India does not have a chance. But I believe this is a ‘Black Swan’ event, as coined by Nassim Nicholas Taleb, meaning an unpredictable event that is beyond what is normally expected of a situation with potentially severe consequences. Companies are already scouting for alternate sources for supplies. Not having a fix on how long this will last, companies will want to secure an alternate supply chain route even as positive news on the containment of the virus begins to surface. Indian production facilities of construction equipment owned by multinationals are already set for exports, with many already established as export hubs for specific models. These could take some load off the demand of countries dependent on Chinese production facilities in the short run. China is the biggest exporter of ceramic products, especially vitrified floor tiles in Europe, the US, Far-Eastern countries and Africa. Indian tile manufacturers from Morbi and others can also look at a spike in demand from markets that hitherto preferred Chinese ceramics. For this to turn into an opportunity, the government must pull its head out of the rabbit hole. It must announce a revised package for exporters as an emergent tactic. Even contractors from India can expect to see a revision in tenders of some projects that have been awarded to Chinese contractors as it would be extremely difficult for them to now provide Chinese workers and machines to undertake the task. Meanwhile, the National Infrastructure Pipeline has an interesting line-up (see CW’s February 2020 Cover Story). The FM has set aside `220 billion towards the National Investment and Infrastructure Fund. This would be leveraged to raise funds from pension and sovereign funds, which would now find the deal worthwhile, given that the impact of the dividend distribution tax has been muted. They have also been provided tax relief when investing in infrastructure. Cube Highways has been agile and is already looking at offloading its road assets at a premium through an InvIT. Stepping in after construction and then offloading after the asset has gained traction could bring smart returns for the courageous. NHAI needs to follow suit by displaying some agility. We do not have anything to ‘Trumpet’ about during the latest visit by the US President; so far, it has only been a good PR exercise. Despite the Godsent opportunity, if we remain absorbed in ‘home’ matters, the world will pass us by. If we want to provide employment to the world’s largest and youngest workforce, we need to wake up and smell the coffee!

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Infrastructure Transport

JNPA Becomes First Indian Port to Cross 10 Million TEU Capacity

The Jawaharlal Nehru Port Authority (JNPA), located at Uran in Navi Mumbai, has become the first port in India to achieve over 10 million TEUs (twenty-foot equivalent units) in container handling capacity.With the recent expansion, the port now operates five container terminals with a combined capacity of 10.4 million TEUs, alongside two liquid and two general cargo terminals.Handling more than half of India’s container traffic, JNPA processed 7.05 million TEUs in 2024 and has moved 15.39 million tonnes of containers and 16.64 million tonnes of total cargo in the first two months of FY 2025â..

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Infrastructure Transport

Nod for Rs. 36.26 billion Expansion of Pune Metro Line 2

The Union Cabinet has approved the Rs.36.26 billion expansion of Pune Metro Line 2, adding 12.75 km of track and 13 new stations to improve east–west connectivity across the city.The project aims to link Pune’s urban core with rapidly growing suburbs, supporting the city’s rising demand for efficient and sustainable transport solutions. This expansion is part of Corridor 2 of the Pune Metro and includes two key routes: Vanaz to Chandani Chowk (Corridor 2A) and Ramwadi to Wagholi/Vitthalwadi (Corridor 2B).It will connect residential, IT, and educational hubs in areas such as Bavdhan, Koth..

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Infrastructure Transport

Assembly begins for ‘Nayak’ TBM on Thane– Borivali Twin Tunnel Project

The assembly of ‘Nayak’, the first of four Tunnel Boring Machines (TBMs) for the Thane–Borivali Twin Tube Tunnel Project, has commenced at the Thane site. Built by German firm Herrenknecht AG and deployed by Megha Engineering & Infrastructure (MEIL), the TBM marks a key milestone in Mumbai’s ambitious 11.8-km underground road corridor beneath Sanjay Gandhi National Park.The twin tunnels will reduce the Thane–Borivali travel distance by 12 km and decongest Thane Ghodbunder Road. ‘Nayak’, with a 13.2-metre diameter, is designed to bore through challenging geological conditions ..

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