Let's get real!
ROADS & HIGHWAYS

Let's get real!

While the world continues to get rattled by man-made disasters (read 'scams' in India) and natural catastrophes (earthquake in Japan), good news trickled in from CONEXPO in Las Vegas where the American economy seemed to be showing a positive upswing, with a strong buyer presence making a beeline for equipment. In exclusive interviews with CW, Suresh Kumar, Assistant Commerce Secretary and Director General of the US Foreign Commercial Service, and Dennis Slater, President, Association of Equipment Manufacturers, unanimously voiced the presence of an upbeat mood. The US has, as part of Obama's plan to boost the economy, enhanced its engagement with the world beyond American shores. The world beyond the US is split between China and India, constituting nearly one-third of the world's figures which means that expectations are very high from both countries.

As per figures from the US, the value of construction put in place last year was $814 billion which is a contraction over previous year's $908 billion by over 10 per cent indicating the extent of spending cuts. Globally, the year 2012 will continue to throw up challenges but the worst seems to be over. This in itself is a major recovery; for instance, Caterpillar lost 38 per cent in revenue terms during the 2009-10 but has now jumped by $6 billion in market capitalisation. Terex and Manitowoc too have shown a remarkable optimism in their financial results; the next year is expected to show a positive, strong improvement.

Worldwide, problems abound. The Japanese catastrophe is likely to cost the country $200 billion in reconstruction costs; there are upheavals hitting the Middle East with most governments facing uprisings; and the US and Europeans have already chosen to engage with Libya in conflict. All this had led to a great pressure on material and commodity costs which were already soaring. Oil has escalated to beyond $100 per barrel and economies are under inflationary pressures. In India too, costs will be a concern area which will dent bottomlines. At such times smart planning, procurement and execution play a key role. Project management is the need of the hour for our Indian companies. This was well brought out and voiced at the 4th Infrastructure Today International Conference organised by ASAPP Conferences, held at Hyderabad earlier last month.

Gautam Bhandari, Head of Infrastructure in India, Middle East and Sub-Saharan Africa, Morgan Stanley, is part of the $4 billion fund formed to invest in infrastructure of which 75 per cent has been invested. In an exclusive chat in his New York office Bhandari cautioned, The infrastructure space is attractive and the verdict is currently in its favour, but it is too early to call it as "settled," as a firm trend is yet to get established. Money can leave as quickly as it came. There is no free ride and a fair process needs to be run to establish a firm place. At every stage the funds need to evaluate the attractiveness of the investment opportunity in relative terms", he avers. While he agrees with the PPP model, he also believes that the engagement of the government in a positive frame enhances the chances of the success of the project. He believes that China's key to success is its brilliant execution, while in India the quality of execution is still suspect despite the success of the T3 airport and the Delhi Metro rail. He reiterated that "opportunity exists but the devil is in the details."

Bhandari's view sums up the agenda before us. While we know that the growth in India has been largely contributed by the private sector, which, going ahead, will need to contribute 50 per cent of the requirement of the $ 1 trillion spending, execution and quality has to match up. It is time we stopped having an exaggeratedview of ourselves and start delivering as per project management standards of excellence.

While the world continues to get rattled by man-made disasters (read 'scams' in India) and natural catastrophes (earthquake in Japan), good news trickled in from CONEXPO in Las Vegas where the American economy seemed to be showing a positive upswing, with a strong buyer presence making a beeline for equipment. In exclusive interviews with CW, Suresh Kumar, Assistant Commerce Secretary and Director General of the US Foreign Commercial Service, and Dennis Slater, President, Association of Equipment Manufacturers, unanimously voiced the presence of an upbeat mood. The US has, as part of Obama's plan to boost the economy, enhanced its engagement with the world beyond American shores. The world beyond the US is split between China and India, constituting nearly one-third of the world's figures which means that expectations are very high from both countries. As per figures from the US, the value of construction put in place last year was $814 billion which is a contraction over previous year's $908 billion by over 10 per cent indicating the extent of spending cuts. Globally, the year 2012 will continue to throw up challenges but the worst seems to be over. This in itself is a major recovery; for instance, Caterpillar lost 38 per cent in revenue terms during the 2009-10 but has now jumped by $6 billion in market capitalisation. Terex and Manitowoc too have shown a remarkable optimism in their financial results; the next year is expected to show a positive, strong improvement. Worldwide, problems abound. The Japanese catastrophe is likely to cost the country $200 billion in reconstruction costs; there are upheavals hitting the Middle East with most governments facing uprisings; and the US and Europeans have already chosen to engage with Libya in conflict. All this had led to a great pressure on material and commodity costs which were already soaring. Oil has escalated to beyond $100 per barrel and economies are under inflationary pressures. In India too, costs will be a concern area which will dent bottomlines. At such times smart planning, procurement and execution play a key role. Project management is the need of the hour for our Indian companies. This was well brought out and voiced at the 4th Infrastructure Today International Conference organised by ASAPP Conferences, held at Hyderabad earlier last month. Gautam Bhandari, Head of Infrastructure in India, Middle East and Sub-Saharan Africa, Morgan Stanley, is part of the $4 billion fund formed to invest in infrastructure of which 75 per cent has been invested. In an exclusive chat in his New York office Bhandari cautioned, The infrastructure space is attractive and the verdict is currently in its favour, but it is too early to call it as settled, as a firm trend is yet to get established. Money can leave as quickly as it came. There is no free ride and a fair process needs to be run to establish a firm place. At every stage the funds need to evaluate the attractiveness of the investment opportunity in relative terms, he avers. While he agrees with the PPP model, he also believes that the engagement of the government in a positive frame enhances the chances of the success of the project. He believes that China's key to success is its brilliant execution, while in India the quality of execution is still suspect despite the success of the T3 airport and the Delhi Metro rail. He reiterated that opportunity exists but the devil is in the details. Bhandari's view sums up the agenda before us. While we know that the growth in India has been largely contributed by the private sector, which, going ahead, will need to contribute 50 per cent of the requirement of the $ 1 trillion spending, execution and quality has to match up. It is time we stopped having an exaggeratedview of ourselves and start delivering as per project management standards of excellence.

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