Alwyn Bowden, President and CEO, Essar Projects
Essar Projects has seen a fair amount of movement in the EPC market in India. NHAI's long overdue push to align commercial and contractual environment for augmenting India's road infrastructure began to deliver results in FY2012. The sector is forecast to register a 44 per cent y-o-y growth-7,300 km to be awarded as compared to 5,083 km in FY2011. And going by the tenders and awards to date, the roads sector might well be the biggest opportunity next year.
On the other hand, the power sector, which at the beginning of FY2012 offered a good portfolio of opportunities, moved into the slow lane due to a couple of key extraneous factors: Export-duty on Indonesian coal and delay in development of Indian coal blocks due to stringent regulatory oversight and implementation of environmental regulations. These two factors affected the profitability of and/or delayed approved projects. Fuel linkages also developed fissures, casting a shadow on financial closures for approved projects.
The ability of project devÂelopers in the private sector to tie in financing will be critical to creation of a portfolio of oppÂortunities for construction comÂpanies in India. Additionally, if the regulatory and general governing environment continues to stagnate, project awards-both from the private and government sectors-and implementation is most likely to slip later into or even beyond FY2012.
That said, we remain bullish on the Indian market for opportunities in the construction sector in FY2012.
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