The $1billion US-based engineering and construction management company, Louis Berger, has been active in India for over 20 years. The New Jersey-based corporation is engaged in a slewof projects, including bridges, tunnels, roads, highways, railways, and transit, aviation and smart cities. Speaking exclusively to INFRASTRUCTURE TODAY, Kshitish V. Nadgauda, Senior Vice President & Managing Director, Asia, Louis Berger, asserts that it is government investment that will continue to provide traction to infrastructure development in India. Admitting that the learning from various projects, especially in the last few years, have been substantial, he says the political will to see infrastructure projects through is themost encouraging sign for all stakeholders.
What are your key areas of focus given the need for capital to create as well as overhaul existing infrastructure?
In the short- and medium-term, we are focused on adding value to areas where we have capabilities. We are already in the metro rail space and have got two new projects. We also want to get into high-speed rail as that is another programme where we can add value. Louis Berger is working on the maglev programme on the New York to Washington DC corridor in the US. Although roads and highways is a relatively old field in India, the government is now keen on providing world-class access control expressways. We can add a lot of value there because these facilities are to be designed very carefully and then implemented. By design, I mean lane width, shoulder width and median separation for safety and mobility.
And then access, which is controlled, comes through well-designed interchanges. Having personally overseen the development of major expressways in the Gulf, I feel that anybody who has worked in the region has had the benefit of being exposed to world-class infrastructure. Forget the West, it is really the Gulf where people get to see greenfield projects and textbook ways of getting them done in terms of quality, right design details and standards.
In Hyderabad, we are working with L&T on an extradosed cable-stayed bridge, which is a combination of a cable-cum-conventional type of structure. Tunnelling is another area where we seek out projects. We recently won what is known as the ômissing link' on the Mumbai-Pune Expressway for capacity augmentation. Basically, it is about bypassing the Western Ghats by introducing a 10-kilometre long tunnel. The tunnel will be separated by long viaducts across a deep valley. What this does is it will give a reasonably straight alignment for the expressway with a very smooth gradient. You will be bypassing the whole hill section to avoid steep gradients, landslides and other safety uncertainties. We have just started working on that project with the Maharashtra State Road Development Corporation (MSRDC). We have completed the techno-economic feasibility study of the proposed airports at Navi Mumbai and Mopa (Goa) and are now conducting it for the Sabarimala (Kerala) airport.
Are you also engaged in some important mid-sized projects?
As an international company, we are only into projects that require capabilities of the higher end of the civil engineering spectrum and resources to deliver them. We are willing to work on small projects, but the only problem is that we do not tend to be very competitive there.
I find it a little disconcerting that a lot of small urban projects in cities like Delhi or Mumbai are going to small consultants, since they tend to be low in value. But these projects actually are among the most challenging. And this is where the government must insist on a company-local or international- that truly has a pedigree and experience, as a fine balance has to be struck between access, mobility and safety. In Mumbai, for instance, the Western Expressway reaches its capacity during peak hours. Junctions are a big part of the problem there, as the roads are inadequately designed. All traffic tends to spill over into the main line and add to the chaos. It really pained me to see the same thing happening in Gurugram too. In the newly planned areas like Gurugram and Noida where new sectors are being opened up, roads should be designed properly. When we design an expressway, we plan the interchanges in such a way that they will not constrain any future expansion such as road widening. As areas develop, you will need more collection points, for otherwise roads will get congested. Therefore, at the beginning, itself, you must select your nodes in such a way that you can add more at intermediate locations in the future. We are participating in a lot of NHAI tenders.
What will be the immediate impact of the ongoing big-ticket projects on the quality of life in the city of Mumbai, which is also the country's commercial hub?
In Mumbai, we are now working on the Versova-Bandra Sea Link, which is an extension of the Bandra-Worli Sea Link. That is a very challenging and much-needed project. If the projects pertaining to new metro lines, roadway corridors and the trans-harbour link get completed over the next five years, Mumbai will be a transformed place in terms of urban transportation. Well, that is how Mumbai was earlier. Unfortunately, when the population growth surged in the late 1990s, the investment in infrastructure could not keep pace and residents were driven to adopt private cars.
Tell us something about your most challenging projects by far.
One of them would be the Chenani-Nashri Tunnel (also called Patnitop Tunnel) project in Jammu. It was challenging in terms of zeroing in on achieving the optimum alignment. The nature of the area was the constraint there as the tunnel goes through the natural habitat of the chinar trees.
Any non-tunnel option would have intruded on the landscape. The biggest challenge was to come up with a solution that would balance the cost and meet environmental requirements. The project actually got delayed quite a bit because of that. One of the important lessons we learned from the project was that multiple issues need to be looked at before configuring the most appropriate solution. We realised wemight not have a perfect solution, but we had a trade-off that struck a balance.
Another would be the Mumbai Metro Line 1 on the Versova-Andheri-Ghatkopar corridor. As Mumbai's first completed metro project, it was a learning experience for everyone. Since it was a public-private partnership (PPP) with Reliance Infrastructure, our people working on it got hands-on experience of the mode. Today, while advising clients on different modes of implementation for PPP projects, we have the experience of what worked and what did not in Mumbai and Hyderabad metro projects. Moreover, our whole experience of dealing with different modes of implementation like PPP; engineering, procurement and construction (EPC); hybrid annuity model (HAM) and build-operate-transfer (BoT) definitely helps our next project to be even more successful.
India would be among the very few countries that have so many modes of development for infrastructure development.
Yes, for me too it was a big learning experience when I returned here! I suddenly realised that policymakers have been very responsive to the needs of the situation. All of these modes were evolved because a certain mode was not working very well. India is way ahead in these terms.
How do you propose to provide integrated and sustainable solutions to a rapidly urbanising India?
Greenfield developments like Dholera and Kandla Port City that we are working on are technically easier because you have a blank canvas to work on. But existing cities like Ajmer are both challenging and interesting. A smart city project typically includes 50 projects of different types like the solid waste collection, lakefront development, transportation, water and waste-water management. When we start working on these projects, we tend to look at them in the context of the whole city to provide integrated solutions. If I take transportation, it has to be seen as a part of an overall network. Also, the solution has to be multi-modal. The future of any Indian city lies inmass transit implementation. Most Indian cities, whether tier 1 or tier 2, will need to have a metro network. But that needs a robust feeder network comprising buses, light rail and tramways. You can also close off some streets to only allow walkers and cyclists.
How do you plan to realise a self-sustaining port city that caters to the needs of its inhabitants?
As far as infrastructure goes, we are introducing sustainable practices wherever possible. For instance, the street lights will be using renewable energy. We have also created an extensive design for stormwater drainage for proper channelisation and storage of rainwater. We have incorporated storage tanks in the design so that the water collected can be used for purposes other than drinking. In the road network, you will have bicycle lanes and sidewalks of ample width. Future requirements for public transport are being accommodated in the right of way by reserving spaces in advance.
Given the growth in the country's aviation sector, would our major urban centres require more than one airport or are mega-airports the way forward?
The requirement would vary from one location to another. For instance, if I were to take up cities like Mumbai or Delhi, it is a no-brainer that new airports need to be built. The way the two cities have spread, it is impractical and unsustainable for passengers to travel two hours on the ground to reach the nearest airport. In Mumbai's case, you presently have the Chattrapati Shivaji International Airport while the Navi Mumbai airport would be coming up. In addition, once we are through with the capacity augmentation project on the MumbaiûPune Expressway, the travel time between the two cities will reduce by a further 40 minutes. Once that happens, Pune airport can also serve a wider area. In fact, you can almost have those three airports working in tandem to distribute traffic.
In a place like Beijing, the infrastructure is developed to a very high degree. The city is served by high-speed rail and road corridors. Therefore, one does notoften get to hear of congestion. In my opinion, for major Indian cities like Mumbai or Delhi, we need multiple airports because in India we cannot move overnight from the infrastructure and other issues that we have today to something that is seamless and perfect. It is probably going to take us two decades to reach that stage. Then there are several other aspects to it. In Mumbai, where the airport is located today, noise pollution is already an issue, and there can be even more problems. Then we do not have the space to add more runways. Our only option, therefore, is to create multiple airports. A perfect example of this is the New York City, which has three airports servicing the tri-state region.
What will it take to create sufficient traction in the infrastructure space?
Undoubtedly, the country needs significant investment in every aspect of infrastructure. The government investment has to drive it. Whenever the American economy goes into recession, the US government pumps money into roadway programmes to provide a boost to the economy. But there is an even more desperate need for it here. In our office, there are people who spend two hours commuting to work each way. And the quality of that commute is not good at all. The very fact that the Delhi Metro is overcrowded is a good thing because that means it is successful. It also means there is a requirement for more lines. But that cannothappen unless there is significant government expenditure, because the capital cost of such projects is very high. In mass transit, a bulk of 60 per cent of the cost is on civil infrastructure.
Whether it is the Mumbai Metro Line 1 or Hyderabad Metro, the PPP programmes have struggled since the investment required is huge. What is now happening is that there are different modes of implementation fora large project. For example, in the metro sector, station development can be privatised. But the initial trust has to come from the government. The government has already announced an investment of Rs 7 trillion in the roadways sector. It is a huge number. As a consultant, we have already seen signs of a revival of projects on the ground. In 2016, we had a slow year and only got two new projects. It was somewhat frustrating. However, from January 2017, the pace has quickened significantly, including that of major projects. All of this will go downstream to the construction sector. Now, even if 30 to 40 per cent of programmes are realised, there could be other issues in terms of the number of qualified companies or personnel available to work on projects, leading to a crunch situation. We are already witnessing that in the metro rail sector where people are moving from one project to another due to aggressive poaching.
Overall, at this point, I remain very optimistic. It is also noteworthy that every client organisation that I have interacted with in the last two years, especially the political leadership, is extremely driven. There is a 24X7 personal involvement to get infrastructure projects off the ground and that is very encouraging.
Given the government's infrastructure push, do you plan to increase your headcount in the near future?
We will have to do that for a couple of reasons. One, in the back office, which executes designs as well as supports our projects on the ground, the number of people has already gone up from nearly 30 to over 100 in the last two years. Louis Berger India is not a back office for other countries and has always operated in a country for that country alone. However, there is also a view that since we are already so well-established and possess high-quality resources in India, we should also support other markets. But that is not the prime intent of our investment here. Two, as we get more project management contracts (PMCs), there will be more people required on the ground to oversee construction. Obviously, the number is going to go up. I would not be surprised if we expand to about 800 people by the middle of this year.