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Construction Industry Review july 7 2014
1. July 07-13, 2014 1
An MMR, Braj Binani Group Publication Volume 3 l Issue No 27 l July 07-13, 2014 l Price: Rs 100
Taxes levied on steel,
cement to fund low-cost housing
said Urban Development Minister M
Venkaiah Naidu.
The account will collect taxes
and other charges that are levied on
building materials such as cement and
steel in the housing industry. Naidu
added that he still has to talk to the
“The government will open an
escrow account to fund affordable
housing in the country. The taxes
levied by the state as well as the
Centre will be collected in this account
to generate revenue to construct
affordable houses in the country,”
Centre announces `1 lakh cr
fund for highways
T h e N a r e n d r a Mo d i - l e d
government will initiate measures to
turn-around the highways sector in
two years’ time by garnering funds to
the tune of Rs 1 lakh crore in a year.
Road Transport & Highways Minister
Nitin Gadkari said, “I will prepare a
blueprint for road sector reforms in
a month. I will arrange funds to the
tune of Rs 1 lakh crore in a year. The
results will be out in two years.”
His statement comes a day after
the new government in a White Paper
blamed the previous rulers’ policies
such as awarding of projects without
proper land acquisition for the
poor performance of road sector
wherein about 60 per cent of the
NHAI’s schemes are embroiled in
FDI in infra to act as push for economic growth
Benefits of Sez, Nimz
to industrial parks
T h e I n t e r n a t i o n a l Co p p e r
Association India’s (ICA) Managing
Director, Sanjeev Ranjan, said that
clear transparent policies and their
implementation is a must, if any
investment cycle is to be started in
any segment.
Speaking about the Budget
expectations, Ranjan said policies
on FDI (foreign direct investment) in
real estate, infrastructure, including
the power sector initiatives to help
restart stalled projects particularly in
the power, coal, roads and railways
would be of great help to the growth
of economy.
T h e I n t e r n a t i o n a l Co p p e r
India has agreed to extend the
benefits of special economic zones
(Sezs) and National Investment &
Manufacturing Zones (Nimz) to the
proposed industrial parks which
would be developed in collaboration
with China. During the recent visit
of Vice President Hamid Ansari to
Beijing, India and China signed a
memorandum of understanding
(MoU) on the creation of industrial
parks.
“The parties confirm that the
cooperation on industrial parks shall
enjoy the support that the Chinese
government grants to overseas
economic and trade cooperation
zones, as well as the benefits not
lower than that envisaged under the
prevailing policy frameworks in India,
such as Sez, Nimz, and existing
policies of the state governments,
as applicable,” stated the signed
MoU.
The MoU would facilitate Chinese
investments in India and would help
Association (ICA) India is a member of
the Copper Alliance and the Indian arm
of the International Copper Association
Ltd, the not-for-profit organization for
promotion of copper worldwide. The
ICA India actively associates with the
growing number of copper users in
India.
“The biggest challenge the Finance
Minister is set to face in his budget
preparation would be how to balance
growth versus inflation, and at the
same time help in creating new jobs
especially in the manufacturing sector,’’
said Ranjan. Currently, manufacturing
contributes just 16 per cent to India’s
GDP, which needs to be at least 25 per
in bridging the ballooning trade
deficit, which now average around
$35 billion a year. The bilateral
trade totaled $65.47 billion last year.
Sezs and Nimzs enjoy tax related
benefits.
The Sezs enjoy 100 per cent
income tax exemption on export
income for the first five years, 50
per cent for the next five years
thereafter and 50 per cent of the
ploughed back export profit for next
five years.
Be s ide s , Nimz , u nde r t h e
National Manufacturing Policy, has
provisions of tax incentives to small
and medium enterprises (SMEs).
Further, the MoU said that both the
sides have agreed for an Industrial
Park Cooperation Working Group,
which will review the progress of
the parks. The group will have equal
number of representatives from both
the countries. China is interested in
setting up parks in states like Uttar
Pradesh, Haryana and Karnataka.
Finance Ministry about the proposal,
and will request the government to
set this money aside for the housing
sector.
Naidu, who is also the housing
and urban poverty alleviation minister,
said that the tax revenue generated
through increased economic activity
on account of the housing scheme
will be channelled back into housing
through this account. The money will
then accrue to the states. He said the
options being considered to address
the urban housing shortage include
interest subvention and public-private
partnerships.
According to the Housing & Urban
Poverty Alleviation Ministry, the country
has a shortage of 18.78 million (1.87
crore) houses in urban areas. It is
estimated that the housing shortage
is likely to go up to 30 million houses
in urban areas by 2022.
Parvesh Minocha, Group Managing
Director of consulting firm Feedback
Infra, said,” To pick up two large
commodities—cement and steel—and
to also include the earnings by states
sounds like a tall order. However, a lot
of such mega steps have been taken
in the past. If it can be pulled off, it will
be fantastic.”
Naidu, while commenting about
the real estate regulatory Bill that
was first mooted by the previous
United Progressive Alliance (UPA)
government, said he was in talks with
states and other stakeholders on it.
“Online automated single-window
approval (of housing projects) is also
a demand by real estate developers,”
he remarked.
The minister listed the steps he
intends to take to improve urban
governance. They included geographic
info rmation systems (GIS)-based
urban planning, making towns and
cities slum- free, promoting cycling
through dedicated cycling tracks,
capacity building of municipalities,
preparing master plans for all cities,
solid waste management and citizens’
participation in managing public spaces.
controversies. Gadkari said the
new government has understood
the problems of the nation including
impediments faced by the highways
sector and was working hard to solve
it. He said the contractors working in
the highways sector will have their
payments within a month.
cent if we are to address 12 million
people joining the workforce.
Given the rising oil prices, poor
monsoon and inflation (CPI) already
nearing double digits, the challenges
become even more testing, he
added. “We expect the government
to announce fiscal incentives for new
capex, where we can see encouraging
participation from sovereign debt
funds of countries like Japan, China,
Germany, France, Saudi Arabia. This
will do well to balance the shortfall
in $1 trillion investment plan which
the 12th Five-Year plan talks about
for infrastructure development,’’ he
said.
2. budget July 07-13, 2014 2
Real Estate longs for transforming Budget
Industry captains outline their expectations
from the new government on its maiden budget
announcement on July 10, 2014
The Union Budget 2014-15
will be the new government’s first
budget. Prime Minister Narendra
Modi has won a historic mandate
on the development agenda and
is essentially free from coalition
compulsions. Therefore, apart from
the fiscal stance, the budget will also
set the policy reform agenda for the
next few years.
T h e n ew g o v e r nme n t h a s
announced a very clear mandate
in terms of housing for all, and
will therefore need to come up
with a detailed affordable housing
policy. Such a policy will have to
focus on increasing the supply of
genuinely affordable homes in the
budget bracket of Rs 20-25 lakh. The
success of such a policy will depend
on respective state governments
playing a proactive role, as well.
Ideal ly, af fordable housing
projects should be allowed on
smaller land parcels so that such
land under private holding can be
monetized effectively. Alternately,
the government can release land
currently being held by it to developers
for affordable housing projects at
“The real estate sector is standing at the cusp of development and the Union Budget
2014-15 can play a catalytic role in taking the sector to the next level. On the institutional
front, giving ‘infrastructure’ status to housing will help real estate developers raise cheap
funds from more credible sources and for longer durations thereby making homes more
affordable.
We also expect that ECB limit which is currently pegged at $1 billion to be removed
since the real estate industry requires funds in excess of $30 billion and this shortfall can be met using ECB.
“For the consumer, tax reliefs could usher in improved buyer sentiment. Income tax rebates on principal amount
currently at Rs 1.5 lakh to be raised to Rs 10 lakh and that on the interest to be increased from Rs 5 lakh to Rs 25 lakh.
Currently there is a 1 percent interest subsidy for home loans applicable to first home buyers up to a limit of Rs 25 lakh;
this should be revised to a more realistic figure of Rs 1 crore.”
Vineet Singh, EVP & Business Head, 99acres.com
“The NDA government is expected to provide
a major boost to the real estate sector in coming
months and this budget would be a testament to the
claim. Although real estate is a state subject, there
are certain areas where reforms initiated by the
central government can improve market sentiment.
“Demand for real estate is primarily driven by employment generation and
urban infrastructure development. Even though an increase in employment
generation is a medium term goal, the silver lining resides in the urban
infrastructure development that has been the focus of the current government.
“Over the last five years, a large number of important infrastructure projects
have been stalled due to delays in approvals from different ministries of the
central government. We expect that implementation of these projects will be
fast tracked in coming months with a strong clarity in the budget with respect
to processes and funds.”
Dr Samantak Das, Chief Economist & Director-Research, Knight Frank India
“Affordable housing policy in real estate is the
need of the hour for the Indian real estate and the
new government has a pivotal task in its hand
to uplift the sector. Credai as a real estate body
suggests to the Finance Minister to implement
recommendations as follows.
Tax (direct and indirect) concessions for affordable housing projects;
affordable housing should be treated as priority sector. Presently, interest rates
charged by the banks to developers and home buyers are at an all-time peak
and need to be brought down. The interest rate at least for home buyers must
be brought down below 7 per cent.
“There is a dire need for an industry status for the realty sector. Once industry
status is granted, funding for the real estate projects will become easier and at
lower interest rate. Banks will not hesitate to lend to the realty sector and this
will also lead to faster completion of projects thus reducing property prices.”
Lalit Kumar Jain, CMD, Kumar Urban Development Ltd & Chairman, Credai
“Considering the lower growth rate of the
economy in the last few years, the forthcoming
Union Budget is very critical and every industry
sector is pinning hopes on it. Being a part of the
real estate industry we hope that the new budget
will bring in reforms and roll out more friendly
policies, some of these could be reforms for allocation of funds to developers at
lower rates, incentivising developers who are adapting practises for sustainable
developments etc.
“For an overall boost to the industry, the government should consider
increasing the tax exemption limit for interest amount payable on home loans.
Also introduction of single window clearance system and steps towards providing
the infrastructure status to the industry will further benefit the sector.”
P Sahel, Vice Chairman, Lotus Greens Developers Pvt Ltd
“The Union Budget 2014-15 is expected
to set a roadmap for the economy as a whole
and the infrastructure sector in particular. The
new government’s announcements about
undertaking river-linking, creating high-speed
train tracks, building low cost airports, expansion
of e-governance, etc. have generated a buzz in infrastructure circles
“In the road sector, government needs to encourage innovative financing
mechanisms which can address the mismatch between loan tenure and
concession period (the former being much shorter than the latter, thus leading
to problems in servicing loans).
For BoT projects, the budget may propose a financing structure where
the repayment schedule is such that 50 per cent of the total debt is repaid
during the loan period and balance 50 per cent is to be repaid by way of bullet
payment at the end of the tenure. With rising investments in infrastructure, the
infrastructure & construction equipment (ICE) industry is also growing in India.
The number of domestic ICE players has increased over the years and many
foreign ICE players are also setting up manufacturing bases in India.”
Hemant Kanoria, CMD, Srei Infrastructure Finance Ltd
“It would be interesting to note that the real estate sector today is no longer just a
materialistic piece of existence, but is a piece of investment which resonates a sense of
aspiration and security. This market has enormous potential and is developing at a rapid
space across all verticals in real estate.
“With globalization at its peak and with new government at the Centre, clubbed with
rapid space development in retail and commerce, real estate is bound to proliferate. Again,
with a behemoth growth in urban infrastructure and real estate, cities have also to overcome some stumbling blocks in
their continuous growth.
“The hurdles such as labour shortage, implementation of land acquisition policy, ambiguity pertaining to land title,
overlapping of laws, streamlining the process for approvals should be looked into. The scope of the interest rate subsidy
for loans for affordable housing should be amplified and broadened to include a wider price band of homes to benefit
buyers in the lower income group.”
Neeraj Gulati, MD, Assotech Realty Pvt Ltd
“In order to promote growth, and the overall wellbeing of a country, government should
maintain appropriate levels of productive investment in infrastructure while providing a level
playing field for private investors and suppliers. Due to structural issues in the infrastructure
sector, the earthmoving and construction industry is being adversely affected.
“Some of our budget recommendations to the new government are as follows:
*On indirect taxation, reduce excise duty from 10 percent to 8 percent and bring it at
par with the automobile industry.
*Combine central excise duty and service tax to facilitate introduction of goods and service tax (GST).
*To revive business confidence, government should ease the process of land acquisition for big ticket projects, and
create special courts for speedy disposal of land acquisition cases.
*In the mining sector, in order to boost competition and focus on efficiency, productivity and value reinstate the L1/
L2 tendering process for government business.”
Ajay Shankar, Country Manager, Caterpillar India
“The manufacturing sector needs to be strengthened to achieve 20-25 per cent growth
in the cement industry over the next three decades. The cement industry is looking forward
to some clear directions and decisions from the new government. There is no denying the
fact that a lot of investment needs to be made in the infrastructure sector, and infrastructural
revival cannot happen without cement.
“The single biggest expectation from the new government is the stability of the strong
policy decisions duly aligned with the vision for the double digit GDP growth of the economy.
“Tax on cement in India is one of the highest in the world, even within the country it is higher than steel, resulting in
one of the lowest per capita consumption of cement in the country. Tax on cement needs to be rationalized.”
Dr Shailendra Chouksey, Wholetime Director, JK Lakshmi Cement
“Anticipating encouraging announcements in the forthcoming budget, the Indian real
estate industry hopes that the new government will be able to re-establish the country as
an economic force and boost consumer and investor confidence.
“We look forward to the announcement of progressive policies pertaining to FDI in real
estate, since the sector is in marked need of a more liberalized funding flow. Global investors
are once again enthusiastically eyeing the Indian market for the immense opportunities it
offers. There is now a very real possibility of a huge increase in foreign investment inflows, and the budget is definitely
the ideal opportunity for taking serious steps to encourage this.
“The real estate industry once again reiterates its sincere call for preferential industry status. Despite many petitions
to the government to this effect, real estate was not been granted this status even though its role as a significant growth
driver for the economy is beyond dispute.”
Anuj Puri, Chairman & Country Head, JLL India
nominal rates. The success of such a
policy will depend on respective state
governments playing a proactive
role, as well.
Also, for affordable housing
projects, density and FAR norms
can be increased to enable mass
housing at lower costs. Developers
of affordable housing can also be
incentivized in various ways, such as
allowing them a certain commercial
component within these projects
which they can sell at market rates.
The Indian real estate sector
also looks forward to a budget that
outlines measures to tackle inflation
without stifling overall growth. Interest
rates must rationalize and home
sales pick up once more.
3. IN PERSON July 07-13, 2014 3
‘Affordable housing is where
the greatest demand lies’
budget is still very much a possibility
increasingly being patronized by
not only lower-to-mid income home
seekers but also by young, well-paid
buyers who could have afforded larger
and more centrally located homes.
There are valid reasons behind this
affordable trend.
The reception of entry-level housing
projects in Pune always generates
a lot of interest from end-users and
investors. The affordable housing
proposition is especially attractive
for first-time home buyers, since they
benefit from a tax deduction of one
lakh rupees on the rate of interest paid
for housing loans up to Rs 25 lakh,
provided the value of the flat does not
exceed Rs 40 lakh.
Investors are not only attracted by
the low price tags of these projects but
they also see that rapid connectivity
enhancements and improving social
and civic infrastructure at these
locations, as well as the fact that
FSI norms and the new improved
conditions we will be able to do 2,000
houses in each of these. Anand Gram
is into the bracket of Rs 5-15 lakh.
Typically a small one-room kitchen
is 450 sq ft, one BHK around 650 sq
ft, two BHK for the income bracket of
people earning between Rs 8,000 to
Rs 25,000 focused on giving a good
standard of living and good housing
formats for Anand Grams.
In Anand Gram typically the
neighborhood is quite decent, also
structurally it is quite open and has
space for good ventilation. The
ventilation and planning is such that
you do not have to switch on lights and
fans all the time of the day. Nothing is
clustered.
Talking about escalation of the
project cost, Nitin Kulkarni partially
agrees that if a builder has to run the
project for three to five years, there is
bound to be cost escalation. If you
promise a project delivery in 2011 and
hand it over the same year, then cost
escalation doesn’t affect.
We are the ones who work on the
cost factors in a big way. Escalation
has not affected our projects in any
way. We are focusing on good planning
and on homes which have a good
sewage treatment plant. Every Anand
Gram has a water treatment plant,
and concrete roads with a lifespan of
10-15 years.
Nitin Kulkarni, Director, Vastushodh Projects Pvt Ltd, Pune, charts
out his success story of Anand Gram and Urban Gram which today are
known as unique concepts of micro-housing township properties, in this
interview with Remona Divekar. Excerpts:
It is no secret that 2013 was not a
very good one for the Indian real estate
sector. The economic slowdown,
coupled with political uncertainty, led
to a downward trend on the property
market.
On the residential property front,
high property prices and home loan
interest rates kept a large number
of buyers waiting on the sidelines
across most Indian markets. However,
despite the overall slowdown in the
sector, the property market in Pune
maintained steady momentum that
tends to define all stable real estate
markets.
At this point in 2014, anticipation
rides high on the outcome of the
general elections. Considering the
current political scenario in the country,
the arrival of a new government
could spell a positive change in the
economic scenario.
Any significant rectification of the
status quo would help in stabilizing
the stock market, which in turn has
relevance to the growth parameters of
real estate development. Meanwhile,
Pune’s real estate market is showing
healthy growth across most asset
segments.
Pune’s mid and luxury residential
property segment has gained a
significant traction over the past two
quarters, resulting in a very healthy rate
of inquiries translating into sales. The
city’s developers are understandably
upbeat about the response that ultra-luxury
housing continues to evoke
in Pune, and are launching projects
with the motto that luxury knows no
recession. Luxury housing in Pune is,
in fact, now defined by a whole new
dimension when it comes to amenities
and conveniences.
In industry terms, super-premium
housing in a city like Pune is defined
by projects which have unit sizes of
3,500 sq ft and above, complemented
with addresses that convey status and
prestige, carrying price tags of Rs
12,000 per sq ft and above.
Driven by passion and armed with
sound technical knowledge, we’re
treading our path to growth through
understanding of our customers, by
translating their needs for today and
tomorrow into quality homes. A young,
dynamic company, Vastushodh is
concentrating on developing a wide
range of properties – eco-housing
to premium residential properties
at well-connected locations in and
around Pune.
Mid-income housing
The luxury homes segment has
been burgeoning on Pune’s real
estate market, with many large players
entering with projects. The affordable
housing segment is obviously where
the greatest demand lies.
Vas tushodh, a 14- year-ol d
company, was founded in 2000 by
its partner Sachin Kulkarni who was
initially focused on row houses, twin
houses, and bungalows mainly in the
upcoming areas of Pune.
In 2010 the company shifted
its focus on affordable housing,
considering the needs of a common
working man. The company before
starting this ambitious project had
not undertaken any such construction
activity in the past.
Nitin Kulkarni says, “We did our
first project Anand Gram at Yavat
which is on Pune-Solapur highway.
We launched it in 2010 and it started
a revolution for the company. At that
point of time we offered units between
Rs 3 and Rs 7 lakh. The project was
spread over 10 acres and had 625
apartments. And the ticket sizes were
between Rs 3 lakh and Rs 7.2 lakh.
“It created quite a buzz and the
campaign never spoke on the prices
but it spoke about the aspirations
of the new buyer. We received very
good response and we sold about
450 apartments at the launch. We
had done around 10,000 to 20,000
to 40,000 sq ft of projects in the past,
so the most important thing was
delivering 2.5 lakh sq ft at a remote
location at Yavat which was about 40-
45 km away from Pune.
“It was the biggest selling point
which was done very efficiently. We
delivered 17 buildings in 14 months.
All these are G+3 buildings, amenities
were quite simple but the specifications
were good. It was a dream turned into
reality when we delivered the first 500
houses to buyers that too in the first
14 months.”
Such are affordable housing
projects providing basic, no-frills
amenities. Over the past couple of
years, Pune has recorded a certain
amount of growth in this segment.
Interestingly, while there has been
compelling growth in the high-end
segment with luxurious 3-4 BHK
homes, the budget housing story is
far more attractive to investors.
A dream-come-true
Pune’s real estate landscape is
expanding constantly, and prices
of land on the outskirts are still low.
This gives developers a chance to
offer affordable 1 and 2 BHK units
price-tagged between Rs 10–22
lakh. These affordable housing
projects are spread across different
sectors of Pune. The emergence
of new townships proves excellent
investment opportunities, as prices
in such projects are set to soar in the
near future.
Anand Gram is an ideal example
of affordable homes where after initial
apprehensions by the industry, quality
flats were sold between Rs 3-7 lakh
that too with authorized Crisil 5- star
ratings. Crisil ratings were given
after studying technical, legal and
commercial aspects of the project.
As Pun e ha s ma n y ma jor
manufacturing industries situated on
the outskirts of the city, the demand
for affordable residential housing is
scaling up among blue collar buyers.
Factors such as constantly improving
connectivity and the increasing
availability of social infrastructures
like hospitals and schools are primary
drivers of investment potential for
these projects.
Since the ticket size was Rs 3-7
lakh a lot of people from unorganized
businesses came to buy houses. We
had anticipated this to happen and we
had a tie-up with many NHFC that is
micro housing finance corporation.
Anand Gram initially was just a
project name later on it became a brand
name. Buying a flat within a limited
Concrete solution
to Pune’s need
There is a need for over 6 lakh
homes in Pune. All developers put
together are just doing 12,000 to
15,000 homes. If we have to cater
to 6 lakh homes we need nearly 500
builders like me to fulfill their needs.
Not a single developer wants to do
projects like Anand Gram. There are
many who do one or two projects, but
there is a necessity where someone
has to do it, lead it and government
has to support it.
Everyone runs after premium
housing and when recessionary trend
comes then it is a cause for worry to
them. In Pune even if new developers
enter the market every day, everyone
can easily survive well.
We do not want to get into premium
housing; we want to construct more
homes like Anand Gram and Urban
Gram to serve people between Rs
8,000 to Rs 15,000 monthly income,
and yet, we have given the common
man an experience of a mall.
Anand Gram is the concrete
solution to the city’s need for affordable
housing. With this unique concept
we help provide an effective yet
affordable option to those who wish
to live in better conditions, slightly
away from crowded, uncomfortable
and expensive localities of the city
with good connectivity.
We provide well-to-do and modern
specifications and amenities, benefits
of cost-effectiveness, community
l i v ing, secur i t y and ambient
surroundings. Thus, Anand Gram
fulfills the need of those aspiring
residents who dream of having a
home of their own, and most of all a
decent contemporary lifestyle.
Anand Gram Talegaon Dhamdhere
many of these projects are by reliable,
market-proven developers, translate
into significantly faster and higher
RoI than mid-income and luxury
housing.
Well thought out concept
Much has been said about the
imbalanced residential supply in Pune.
Premium or luxury housing projects
seem to be given more importance
by developers than budget homes or
affordable housing, where the greatest
need lies.
Pune is a growing city, and there
is a considerable annual influx of new
manpower from other cities. This is
perennially pushing up the demand for
lower-cost housing by people who are
just beginning their careers or are in
lower-paid jobs but still aspire towards
home ownership.
Anand Gram with a unique concept
of a micro township are our on-going
success stories. Anand Gram and
Urban Gram invested in only land
and sanctions. Later on it becomes a
self-sustaining model; the projects are
done and constructed fast.
We have delivered two Anand
Grams, one in Yavat and other is in
Talegaon. The Wakre one is in very
advanced stages of construction. Two
to three months down the line it will be
ready. There are five Anand Grams
already rolled out in various stages of
construction and being handed
We have two major Anand Grams
lined up, documentation and sanctions
are in place and waiting for environment
clearance. Both these are much bigger
in scale in whatever Anand Grams we
have tapped.
One is in Boiser and the other is in
Bhandgaon which is again on Pune-
Solapur highway. Both are around
20-21 acres of land. With the new
Anand Gram Yavat Urban Gram Kirkitwadi
4. INFRASTRUCTURE July 07-13, 2014 4
Singapore to assist India
build smart cities
Singapore has of fered ful l
assistance to Prime Minister Narendra
Modi to fulfill his dream of building
smart cities in India. In what was
a first visit by a foreign minister of
a South-East Asian country since
the Modi government took charge,
Singapore’s K Shanmugam met his
Indian counterpart Sushma Swaraj
and NSA Ajit Doval to pitch for greater
Indian presence in the region.
Singapore is also keen to expand
defence cooperation with India and
would await relaxation of FDI norms
in the upcoming budget. Its defence
minister is visiting Delhi in August.
Both countries hold annual defence
exercises while Singapore also
exports arms to India. Singapore is
the largest source of FDI to India.
Similarly, Indian firms use Singapore
as a base to expand their business in
South-East Asia.
Not many are aware that Modi
had led a business delegation to
Singapore in 2006. And in 2014,
Singapore is a partner country for the
Vibrant Gujarat convention. India and
Singapore signed the CECA in 2005
but there are pending issues to be
addressed under that agreement.
France to give 1b euro
for sustainable projects
France has proposed to give India
1 billion euro ($1.4 billion) credit line
to fund sustainable infrastructure and
urban development projects, said
Foreign Minister Laurent Fabius. The
credit line would be available over
three years and delivered through the
French Development Agency, Fabius.
India, which has said it needs
$1 trillion of investment by 2017 to
upgrade its creaking infrastructure, is
keen to attract foreign development
agencies and companies to help
finance new roads, railways and cities.
Fabius is the first of a string of
Western politicians due to visit India
over the next few weeks for talks with
Modi and his government, drawn
in part by the prospect of lucrative
defence deals that stalled under the
last administration. Fabius called on
Modi, ahead of his visit to India’s
finance capital Mumbai and invited
him to France.
During the meeting, Modi sought
French involvement in areas including
low-cost defence manufacturing.
Some countries find extending a credit
line or investing through development
arms a useful way to boost ties with
India and also gain an early link
to the South Asian nation’s future
infrastructure schemes.
Cement, preferred choice
of Road Ministry
The Road Transport & Highways
Ministry is considering an option
to make use of concrete cement
mandatory as a part of the bid for fully
government-funded projects as well as
public-private partnership projects.
The ministry discussed the issue
at some recent meetings. Roads &
Highways Minister Nitin Gadkari had
stated his preference for concrete
cement roads as opposed to bitumen.
The ministry is also considering entering
into rate contracts with companies to
buy concrete and cement so that
builders and contractors can acquire
the material at cheaper rates.
“For government-funded contracts,
we have already started evaluating
cost options for various projects to use
concrete cement where there is a lower
lifecycle cost,” said a source.
In a rate contract, the price of a
material is finalized in advance by the
procurement agency and vendors. As
and when the procurement agency
or its arms require the product, the
vendor supplies it at the agreed rate.
This also involves commitment on
volumes.
Procurement of large volumes
for national highway projects raises
the possibility of discounts. Usually,
concrete cement roads cost less
than bitumen surfaces on a lifecycle
basis (over a 20-year period). Though
the initial outlay on concrete roads is
higher, maintenance costs are less,
said a government official.
Depending on various factors,
including the location of the road,
the initial cost of building a concrete
road could be higher by 5-30 per
cent. Despite lower lifecycle costs,
private developers managing long-term
(20-30 years) projects have so
far avoided building concrete cement
roads.
The exceptions include those
who won the rights to make six-lane
roads out of four-lane ones built with
concrete cement. About 3,500 km of
highways, some of which have been
funded by the World Bank, have been
constructed using concrete cement.
Another option is to mandate the use
of cement only for government-funded
roads, said an official.
Single window clearance
likely for real estate
The Telangana government is
considering coming out with norms
for a single window clearance system
for real estate and other construction
projects aiming at streamlining the
functioning and cutting short project-implementation
time.
The state minister for IT and
Panchayat Raj, KT Rama Rao, has
said that the government was in
favour of coming out with a policy
that helps developers implement
projects faster with early clearance
from the government.
Speaking at a real estate event
Gruhapravesham, the minister wanted
the industry players, including real
estate sector companies to come up
with suggestions to expedite project
implementation. Inaugurating the
first property show after bifurcation
of the state, he said his government
is committed to facilitating growth of
the sector and wanted suggestions
which the government will consider.
C Shekar Reddy, Credai National
President, said, “Hyderabad is
a global city with unmatched
infrastructure, climate, culture and
availability of skilled manpower. The
government will announce a new
industrial policy with a package
of incentives to boost industrial
growth in Telangana, which will
make Hyderabad a destination for
investments.”
Lavasa files IPO papers
to raise `750 cr
Cons t ruct ion major HCC’ s
realty arm Lavasa Corporation filed
documents with market regulator Sebi
for launching an initial public offer
(IPO) to raise Rs 750 crore. Lavasa
Corporation, which is developing a
large township (hill city) in 10,000
hectares in Lavasa near Pune, is
making a second attempt to raise
money through IPO.
In November 2010, Lavasa
Corporation had got the Sebi clearance
for an IPO to raise up to Rs 2,000 crore,
but bad market conditions forced the
company to scrap the plan. Lavasa
Corporation has filed its draft red-herring
prospectus with Sebi to go in
for an initial public offering of its equity
shares of Rs 10 each aggregating
to Rs 750 crore, said Hindustan
Construction Company.
“Lavasa is finally back on track after
almost three years of delays on account
of government interventions. The
project will need additional funding,”
said its Chairman & Managing Director
Ajit Gulabchand.
While the first phase of Lavasa
is near complete, the proposed
commercial business park, in the
second phase, is likely to be completed
by October 2015. So far, the company
has handed over more than 600
residential units to city management
service department and over 500 units
to customers.
India to have world’s tallest
girder rail bridge
in North-East
The much-delayed railway link to
Manipur’s capital Imphal is set to get
the world’s tallest girder rail bridge on
the 125-km-long Jiribam-Tupul-Imphal
route. First included in the 2003-2004
Central budget, the Jiribam-Tupul-
Imphal project has seen many delays,
and construction is not even one-third
the way through, but the Railways says
it has so far completed seven of the
46 tunnels on the project, with the NF
Railways saying it will complete five
more in the current year.
“Last week we completed tunnel
no 14 that passes under the Silchar-
Imphal National Highway-37, with
which we have so far completed 19.5
km of the 39.4 km of total tunnel length
that the Jiribam-Imphal track will have.
The longest tunnel on this route will be
10.7 km in length.
“But the biggest feat the Railways
has been working on is bridge no
164 which will have a proposed pier
height of 141 mt and would make it
the tallest girder rail bridge in the world.
At present, the Malarijeka via-duct in
Montenegro, Europe, with a height
of 139 metre, is the highest such rail
bridge, said the official.
Declared as a National Project in
2012, the Jiribam-Tupul-Imphal project
has already missed two deadlines,
with the revised target for completion
now fixed at 2022. “We however want
to complete the Jiribam-Tupul 84-km
section by March 2016 in the first
phase. This portion will require 1,310
hectares of land out of which work is
in progress on 1,263 hectares. There
will be 112 minor bridges and six major
bridges, out of which 52 minor bridges
have been already completed,” said
the NF Railway official.
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t Infra Equip Pvt. Ltd., Dhanbad
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t PAL Infrastructure Solutions,
Jammu
t PACT Machines Pvt. Ltd., Cochin
t Pollutech Engineering,
Bhubaneshwar
t Suchita Earthmoving Solutions,
Guwahati
t Suchita Millenium Projects Pvt.
Ltd, Kolkata
t Svenska Technologies Pvt. Ltd.,
Thane
t SVP Mining Technologies Pvt.
Ltd., Raipur
t Vijay Engineering Equipment,
Hyderabad
t West India Equipments Pvt.
Ltd., Ahmedabad
t Wilworth Earth Movers Pvt. Ltd.,
Bangalore
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6. PROJECTS UPDAET July 07-13, 2014 6
Oz keen to explore India’s
infra in partnership
Railways to carry out
2,000-km track electrification
Acting on the recommendations
of the Rakesh Mohan panel on the
transport sector, the Railways is
likely to carry out electrification of
around 2,000 km of its tracks this
fiscal. Most of this will be done on the
never-tried-before annuity model. An
announcement is likely to be expected
in the rail budget on July 8.
At present, the railways has almost
38 per cent (24,800 km) of its network
electrified that carries almost 67 per
cent of the freight traffic and 51 per
cent of the passenger traffic. The
power bill of the railways at present is
Rs 10,880 crore whereas its diesel bill
Adani Ports eyes port buyout
on the south-east coast
Adani Ports Sez, India’s largest
port operator, is seeking further
acquisitions after taking over Dhamra
Port on the east coast recently. It’s
looking to buy a port on the southeast
coast to strengthen its presence
across the country, said a source
familiar with the matter.
It is also in talks with several
international port operators to sell a
significant stake in its Hazira operations
in Gujarat to free up cash and get
assured shipping lines that will come
with such partnerships.
“Adani is rationalizing its port
assets in India. They will use money
from Hazira to buy something in
the south,” said the source. With a
strong presence on the west coast
with flagship Mundra Port and on the
east coast with the Rs 5,500 crore
Dhamra Port, the company wants to
is around Rs 22,000 crore. This shows
how important is faster electrification
in reducing the national transporter’s
expenses on energy and also cutting
the country’s oil import bill. The cost
of electrification is around Rs 1.5
crore per kilometer.
The Rakesh Mohan committee
had suggested that the Railways
take up electrification on a priority
basis and said it should be seen as
a means of cutting use of fossil fuel
energy for rail transport.
“Route electrification could be
the most successful of the public-private
partnership (PPP) projects
extend its reach further south. It is
more likely to buy an asset in Andhra
Pradesh as its presence in Tamil Nadu
is ensured after it won the bid to build a
container terminal in Ennore this year.
In Andhra Pradesh, Adani has a small
coal-handling operation at Vizag. The
company declined to comment on
the story.
The ports at Krishnapatnam,
Gangavaram and Machilipatnam are
likely targets in Andhra Pradesh. In
Tamil Nadu, Karaikal Port could be
a target.
The slowdown hit ports that spent
thousands of crores of rupees during
the boom on developing east coast
facilities. Today they are staring at
unmet revenue targets, anaemic cargo
growth and balance sheets weighed
down by debt.
The enterprise value of these ports
being undertaken by the Railways.
At present, running on diesel is
more than two times costlier than
the electric route. So whatever
the Railways save on the fuel can
be paid to contractors annually.
We understand that such projects
have good traction and returns on
investments are faster which will
interest foreign technology giants,”
said a railway board official.
The Railways is expecting private
companies such as Alstom, Siemens,
KEC and its own PSUs such as Ircon
and Rites to invest in the electrification
projects.
Australia wants to explore new
operation fields in various sectors of
infrastructure in partnership with India,
said a top Australian official. “We
(Australia) are developing economic
relations with India with strategic
moves. In partnership, we want to
explore new fields of operation in
various sectors of infrastructure,” said
Australian Consul General to India
Mark Pierce.
Pierce, along with Australia’s Trade
Commissioner for Northern India
Grayson Perry and a representative of
Japan’s trade body Yasuhide Yamada,
were in India to take part in a day-long
international seminar on ‘public-private
partnership’ (PPP) model and
infrastructure projects.
The speakers, on the occasion
shared Australis’a experience in
financing and development of
infrastructure projects, a representative
from Japan shared their experience
in developing and managing
infrastructure in India. “Australia has
a significant expertise in development
of infrastructure major projects
through the PPP model,” said Trade
Commissioner Grayson Perry.
The Japanese representative said
that Japan, with Australia’s help, has
also offered the best PPP model
to develop infrastructure in India.
“Australia, in partnership with Japan,
can offer India a significant expertise
in infrastructure PPP. Japan’s official
development assistance programme
has proven to be vital for the growth
of Indian infrastructure in landmark
projects such as the Delhi Metro rail,
Mumbai-Delhi Freight Corridor and
Delhi-Mumbai Industrial Corridor,” said
Japan External Trade Organization’s
Director Yasuhide Yamada.
‘Will clear `35k cr
more road projects
in 8-10 days’: Gadkari
After having recently cleared stalled
highway projects worth Rs 40,000
crore, the government is now set to
sort out issues relating to pending
schemes involving an expenditure
of Rs 35,000 crore over the next
8-10 days, said Union Minister Nitin
Gadkari.
“I have already cleared projects
worth Rs 40,000 crore of the Rs 75,000
crore stalled projects. I will sort out
the issues involving the remaining
ones in the next 8-10 days,” said
India seeks Japan
investment to build smart
cities, bullet trains
India has sought Japanese
investment to develop 100 smart
cities and high-speed bullet trains
to improve infrastructure and create
jobs. “Japan is a natural partner of
India. Japan is best in developing
smart cities, development of high-speed
t rains. . . in the next f ive
years, we need 10,000 Japanese
companies. We will hand-hold them,”
said Amitabh Kant, Secretary in the
Department of Industrial Policy
Promotion, at a Ficci function.
Kant said Japan has already
formed a partnership with India for
the Delhi-Mumbai Industrial Corridor
(DMIC) project, a 1,483 kilometre
dedicated freight corridor. He said
about 1,000 Japanese companies
currently have a presence in India.
In its election manifesto, the
ruling Bharatiya Janata Party said
it would initiate the building of 100
India Cements to invest
Rs 75 cr in TN facility
India Cements plans to invest
around Rs 75 crore in its Shankar
Nagar facility in Tamil Nadu, mainly to
improve product quality and energy
efficiency measures, according to
company sources. The company would
start associated works once it receives
environment clearance, and it could
take 15 months to complete them.
Gadkari, Minister of Road, Transport
Highways, while addressing a function
to commemorate the 142nd Foundation
Day of the Mumbai Port Trust.
Gadkari said some 265 road and
national highway projects worth Rs
75,000 crore were stalled due to
reasons ranging from land acquisition
to environment clearance and had
turned into Non-performing Assets,
with several companies executing
those going for Corporate Debt
Restructuring.
new cities, enabled with the latest in
technology and infrastructure. India
has proposed to build smart cities
under the DMIC project. They will
have self-sustainable habitats with
minimal pollution levels, maximum
recycling, optimized energy supplies
and efficient public transportation.
“Rapid urbanization is happening
in India. About 750 million people
would get into the urbanization
process in the next one decade and
in all these things, Japan will be a
natural partner,” he added. He said
Japan would become a key player in
the development of Indian economy.
“Today, there is an opportunity to
work with Japan. We look forward to
work with Japan,” he said.
India received $16.26 billion worth
of foreign direct investment from
Japan between April 2000 and April
2014.
The works include replacing
old cement mills to improve quality
of cement and reduce power
consumption. As against a capacity
of 1.3 million tons per annum (mtpa)
in 1989, over the past two decades
it expanded its total capacity to 15.5
mtpa.
It has seven integrated cement
plants located in Tamil Nadu and
Andhra Pradesh; one in Rajasthan
(through its subsidiary Trinetra Cement
Ltd with a capacity of 1.5 mtpa) and
two grinding units each in TN and
Maharashtra.
Its overall plant capacity utilization
stood at around 70 per cent. India
Cements Vice Chairman Managing
Director N Srinivasan said the
Centre should accord top priority to
infrastructure development and ensure
the completion of pending projects.
is in the range of Rs 3,000-5,000
crore, according to industry sources.
However, with more supply than
demand in the region, sellers are at
a disadvantage. “There are many
good assets on the block on the
south-east coast. Adanis are driving
a hard bargain and are looking to buy
something cost-to-cost.”
7. ETCHNOLOGY July 07-13, 2014 7
Bentley Advantage seminar
on innovative software
The Bentley Advantage seminar,
which was recently held in Mumbai,
provided compelling insights on the
future of Bentley Systems’ innovative
software and services for sustaining
infrastructure.
It featured presentations by
Bentley executives on the latest
technologies enabling information
mobility across multiple disciplines
and infrastructure design, build, and
operations lifecycle. The ultimate goal
of the sessions was to help Bentley
users maximize the return on their
software investments as they improve
the efficiency and effectiveness of
their projects and/or infrastructure
operations.
Malcolm Walter, Bentley’s Senior
Vice President Chief Operating
Officer, delivered the corporate
keynote presentation to around 260
delegates who were in attendance at
this event. The keynote presentation
highlighted the following topics.
Bentley’s BIM Advancement: In
November 2013, during its annual
Year in Infrastructure conference
for the world’s leading executives in
infrastructure design, construction,
and operations, Bentley introduced
a new way of looking at BIM, as it
advances beyond 3D design and
visualization.
As explained during the Bentley
Adv a n t age s emi n a r, the two
directions of this BIM advantage
together achieve better-performing
assets through increased depth
of information mobility and better-performing
projects through increased
breadth of information mobility. This
next stage of the collaborative BIM
advancement has been referred to as
BIM Level 2 by the British government
in its mandate to extend BIM benefits
into construction.
Level 2 Optioneering contributes to
better asset performance by enabling
infrastructure professionals to
explore alternatives, including across
disciplines, to an extent that would not
be feasible without new simulation and
analytical software and computational
resources. Level 2 Project Delivery
improves project performance,
beyond design, through construction,
for collaborative consideration of cost,
schedule, and risk.
On the horizon is BIM Level 3,
which extends the lifecycle of BIM
into the operations of the completed
asset. In this phase, information
mobility makes design data and
as-constructed models available for
operations and maintenance, while
‘big data’ from sensors and operating
metrics contribute to the creation
of a rich, ‘immersive’ information
model of the built asset to improve
infrastructure performance, safety,
and sustainability.
Information mobility: Bentley’s
enablers of information mobility include
i-models, eB Information Manager,
and Bentley Connect. i-models,
which became mobile in 2013 for
use in field apps, convey AECO
deliverables across the infrastructure
lifecycle and enable information to
be shared among Bentley’s three
platforms: MicroStation, ProjectWise,
and AssetWise.
i-models provide provenance –
knowledge of its origin and evolution,
essentially its change history – and
support the most popular industry
applications and standards.
eB Information Manager underlies
both ProjectWise and AssetWise, and
maintains the relationships and the
changes within information elements
throughout the project and asset
lifecycles.
Bentley connect lets Bentley users
connect through cloud services
to improve information mobility
even beyond firewalls. Bentley is
implementing Bentley Connect
through the Microsoft Cloud service
to enable its users to augment and
improve the technology they are
already employing, which in many
cases is Windows based. As a
result, Bentley Connect extends
information mobility without requiring
users to start over from a technology
standpoint.
In addition to these enablers of
information mobility, Bentley also offers
mobile apps for iPad, iPhone, and
Android devices. This advancement
allows users to seamlessly continue
workflows while in the field or on the
go. Among the apps are Bentley Map
Mobile, Field Supervisor, InspectTech
Collector Mobile, Navigator Mobile,
and ProjectWise Explorer Mobile.
MANAGEservices: Through its
new MANAGEservices, Bentley can
provision, manage, monitor, and
support its industry-leading software
solutions for architecture, engineering,
and construction wherever and
whenever users need them – through
cloud services operating in a hybrid
environment.
Bent ley’s MANAGEservices
helps architecture, engineering, and
construction firms, along with owner-operators,
get the most business
value out of their software investments.
Leveraging Bentley’s vast experience
in infrastructure engineering and
knowledge of business process
disciplines, users achieve the highest
standards in project execution and/
or asset management, reducing the
need for in-house provisioning and
management of IT resources.
Be n t l e y MANAGE s e r v i c e s
supports a range of subscriptions and
transaction-based fees without any
upfront capital investments. Bentley
provides predictability in managing
costs, allowing users to pay only for
value delivered.
Bentley’s solutions: Industry-focused
parallel sessions were
organized in the afternoon to showcase
Bentley’s solutions for Oil Gas,
EPCs and Offshore, Architecture and
Engineering Consultants, and Utilities
Water-wastewater industries, and
to share global best practices from
international projects which have
innovatively used Bentley solutions.
Five user presenters shared their
experiences of working with Bentley
solutions on their Indian projects.
During the event, as many as 18
local users were also recognized for
their 2013 ‘Be Inspired’ project
submissions.
Bentley Systems is the global leader
dedicated to providing architects,
engineers, geospatial professionals,
constructors, and owner-operators
with comprehensive software solutions
for advancing the design, construction,
and operations of infrastructure.
Bentley users leverage information
mobility across disciplines and
throughout the infrastructure lifecycle
to deliver better-performing projects
and assets. Bentley solutions
encompass MicroStation applications
for information modeling, ProjectWise
collaboration services to deliver
integrated projects, and AssetWise
operations services to achieve intelligent
infrastructure – complemented by
worldwide professional services and
comprehensive managed services.
Founded in 1984, Bentley has
more than 3,000 colleagues in over
50 countries, more than $600 million
in annual revenues, and since 2006
has invested more than $1 billion
in research, development, and
acquisitions.
Bentley’s new Subsurface Utility Engineering
breakthrough technology
Bentley Systems, Incorporated, one
of the leading company dedicated to
providing comprehensive software
solutions for sustaining infrastructure,
today announced the availability
of Bentley’s Subsurface Utility
Engineering (SUE).
This breakthrough technology
for the integrated engineering
management of underground utility
networks for water, storm water,
gas, and electric services is built on
OpenRoads, Bentley’s collaborative
BIM advancement for multi-discipline
civil engineering projects. Bentley’s
SUE brings together data from multiple
sources and geo-coordinates it for
3D modeling, interactive inspection,
and utility conflict detection and clash
resolution.
By providing a framework of
powerful software tools and rich
content to quickly and easi l y
generate high-fidelity, intelligent 3D
feature-based models of the buried
construction zone, SUE mitigates the
risks of building in utility-congested,
‘call-before-you-dig’ underground
environments. These risks can range
from project delays to damaged
subsurface utilities to explosions that
threaten below- and above-ground
infrastructure as well as human life.
Commenting on the new offering,
Bentley Systems CEO Greg Bentley
said, “In cities around the world, the
area that I believe poses the biggest
risk to those designing, building, and
operating infrastructure is found by
looking down.
“It’s also the area for which it seems
there’s been the least advancement of
information modeling and information
mobility to improve construction
throughput and enhance the reliability,
safety, and resilience of infrastructure
assets.
“And for Bentley Systems, with
our portfolio spanning building, civil,
geospatial, and plant domains, it’s a
particular priority – as all infrastructure
projects are impacted by subsurface
condi t ions , res t r i c t ions , and
requirements.”
He continued, “Our Subsurface
Utility Engineering software uniquely
provides across disciplines a powerful
new information modeling application.
Its use will empower project teams
to comprehensively understand, and
more effectively and efficiently resolve,
underground infrastructure conflicts.”
SUE automatically creates 3D
models from survey information,
CAD data, GIS, Excel spreadsheets,
Oracle databases, and other industry
standard sources of information. In
addition, it maintains a relationship
between CAD and GIS utility sources
and tracks civil features to ensure
that data is always synchronized and
up to date.
Using the visualization and clash
detection capabilities of SUE, users
can readily identify and resolve
conflicts between new construction
features and existing utilities during the
design phase. This helps mitigate risk
during construction, lowers costs, and
sustains asset performance.
SUE further enables immersive
modeling by empowering users to
combine active plan, profile, and
cross-section views with innovative
3D modeling technology, providing
additional context for decision
making. SUE’s additional provision of
parametric design features includes
fully dynamic rules, relationships, and
constraints built into the modeling
workflow.
The net result of these advancements
is improved design quality with unique
‘optioneering’ capabilities that allow
users to readily create and compare
design alternatives. Moreover, the
intelligent 3D modeling capabilities
deliver against the US Federal
Highway Administration’s ‘MAP-21’
recommendations for 3D modeling/
virtual construction and visualization
technology.
SUE also conforms to essential
elements of the Standard Guideline
for the Collection and Depiction of
Existing Subsurface Utility Data (38-
02) that govern subsurface utility
information quality.
This standard assists engineers,
project and utility owners, and
constructors in developing strategies to
reduce risk by improving the reliability
of information on existing subsurface
utilities in a defined manner.
SUE provides indispensable
insight for contractors employing
alternative delivery approaches such
as design-build, and taking on the
risks associated with identifying and
resolving subsurface utility conflicts.
Mo s t s i g n i f i c a n t l y, t h o s e
substantially benefitting from SUE’s
powerful capabilities include cities and
other owners of infrastructure – and all
whose quality of life is sustained by
underground utilities.
OpenRoads, Bentley’s collaborative
BIM advancement for multi-discipline
civil engineering projects, is the
successor to Bentley’s InRoads,
Geopak, and MX offerings. OpenRoads
continues to advance what’s possible
in road design, construction, and
operations.
Its industry-leading innovations
empower users to achieve BIM Level
2 through immersive modeling,
design-time visualization, design
intent capture and persistence,
hypermodeling, construction-driven
engineering, and information mobility
across engineering disciplines and the
infrastructure lifecycle.
8. Cement July 07-13, 2014 8
Infrastructure and
housing will be essential
building blocks for
modern India, and
high-quality cement
and concrete at cost-effective
prices will be
prerequisites for both
sectors
(Concluding Part 5)
V I S I O N 2 0 2 5
A promising future for cement industry
T h e c eme n t i n d u s t r y h a s
undergone a remarkable growth
trajectory over the past couple
of decades, and is expected to
transform itself again over the next
decade. Production is likely to
increase by more than 2.5 times,
requiring significant investments in
capacity and capability. Moreover,
changes in end-usage segments
will require several adaptations to
cement companies’ operating and
business models.
With adequate government support
and proactive industry measures, the
industry has the potential to play an
instrumental role in building a modern
India and could become globally
admired for best-in-class efficiency,
technology, and processes.
Keeping these possibilities in
mind—along with the challenges
that need to be overcome along
the way—a long-term vision, built
on three pillars, can be considered.
(Figure 1).
Building modern India
Infrastructure and housing will be
essential building blocks for modern
India, and high-quality cement and
concrete at cost-effective prices will
be prerequisites for both sectors,
requiring the industry to build
adequate supply capacity to meet
the demand.
To ensure the viability of added
capacity, continuous efforts to
improve cost efficiencies will be
crucial. In addition, advancements
in product offerings (value-added
products), the distribution model (bulk
delivery), and structural design and
specifications can help promote best-in-
class construction practices.
The industry can be a role model
for other process and manufacturing
indust r ies by developing best
practices while using state-of-the-art
technology for cement production
and its application. Secure long-term
energy requirements in a
cost-effective, sustainable manner,
and emerge as a world leader in
sustainability.
The projected long-term growth
in cement production will result in a
corresponding increase in thermal
and electrical energy requirements
for the sector. The supply of coal,
the preferred source for thermal
and electrical energy, is already
bottle¬necked.
In addition, the impact of efficiency
improvements is slowly plateauing. It
will be to the industry’s advantage
to work creatively to further improve
energy efficiency, while increasing
adoption of alternative sources of
energy.
Investments in building strong
local RD capabilities will be needed
to keep up with—if not ahead of—
global advancements in technology
while using the industry’s increasing
scale to push efficiency to the next
level.
Admired industry
The cement industry has directly
contributed to the nation with taxes
and jobs. Indirectly, it has contributed
by developing communities in several
remote areas, acting as a sustainable
outlet for hazardous waste material,
and taking big strides to improve
safety standards for its workers.
The industry will benef it by
becoming more appeal ing t o
employees and to communities. A
continued focus on the well-being of
other key stakeholders—by becoming
an end-to-end solution provider for
customers and offering good long-term
returns for shareholders—will
also need to be maintained. These
pillars of the vision for 2025 will be
founded on seven objectives (Figure
2). Success will depend on effective
collaboration between industry and
government.
Industry imperatives
Achieving the vision for 2025 will
require the industry to take on seven
objectives:
1: Ensure viability of new
capacity addition
Improve operating cost structure.
Increase industry efficiency by
developing innovative manufacturing
processes and technology and
bringing down operating costs. Some
ways in which this could be done
include the following:
Maximize use of blending material
and share of blended cement. Improve
cost efficiency by increasing the use
of fly ash and selling more blended
cement by offering institutional buyers
a strong integrated proposition.
Create awareness about benefits
of blended cement that is made in a
controlled environment with good-quality
ash in adherence with the
BIS, resulting in a more reliable final
product.
Develop and promote use of
performance-based blended
cement, which is
infrastructure. Purchase private
rakes and special-purpose wagons.
Optimally design the manufacturing
asset footprint to optimize the
overall logistics and production
cost. Increase the use of inland
waterways as an alternative to rail
and road wherever feasible.
Secure long- term supply of
key input raw materials (limestone
and gypsum). The current proven
limestone reserves might only meet
the demand of the next 25 to 30
years. The government has identified
other lower-probability resources,
but exploration and mining will need
to intensify. Similarly, the availability
of gypsum from domestic sources
will become a challenge in 2020 and
beyond.
Dr ive avai labi l i ty of ski l led
resources. Take proactive steps
to increase the supply of skilled
labour by setting up dedicated
cement training institutes. This can
be achieved with the adoption of ITIs
through public-private partnerships
with the government and by setting
up private training centres.
3: Promote best global
practices in use and delivery
of cement
Ramp up productive use of
cement. Increasing the use of cement
in underpenetrated applications can
generate much higher demand. Two
crucial applications are concrete
roads and cement-lined canals.
Three moves are essential:
Adopt tailored approach for variety
of concrete roads. For rural roads,
promote customized products such
as cell-filled concrete pavement. For
urban roads, endorse new solutions
Goals of Vision 2025
Build relationships with key
influencers such as architects and
designers, and involve them in the
early stages of product and solution
design.
Build sufficient bulk-handling
infrastructure. Gear up to manage
the required increase in bulk-handling
capabilities: Develop bulk terminals
as close to grinding units as possible
to optimize on logistics. Alternatively,
invest in special-purpose vehicles to
facilitate bulk delivery where terminals
are not close to grinding units.
4: Reduce energy
requirements
R e d u c e s p e c i f i c e n e r g y
requirements per ton of cement by
10 to 12 per cent. Technological
improvements to bring in efficiencies.
Pursue technological improvements,
aiming for a 5 to 8 per cent gain
in energy efficiency over the next
decade. Changes will include using
the latest high-efficiency clinker
coolers, improving the efficiency of
the grinding stage, using multichannel
burners, and improving process fans
and auxiliary equipment.
Another move that will help is
phasing out inefficient equipment.
Retrofit with the latest technology in
older plants wherever viable.
A proactive
to realize PAT (Perform, Achieve,
Trade) targets.
Work with other stakeholders.
Develop the requisite infrastructure
in cooperation with waste-producing
industries and non-governmental
organizations. Improve the viability of
WHR technology through innovation
to increase the adoption rate. Use
more renewable sources to generate
power, aiming for up to 10 per cent
of electrical power coming from
renewable sources.
6: Debottleneck supply
of domestic coal while
maximizing use of petcoke
Use domestic coal and petcoke
to fulfill at least 50 per cent of energy
needs. Push the agenda with the
government to gain access to captive
coal mines while forging strategic tie-ups
for a fair share of the supply.
The supply of domestic petcoke
is expected to increase to more than
22 mtpa by 2025. Industry will need
to maximize its use through effective
tie-ups with suppliers.
7: Ensure strong focus
on employee welfare and
retention
The industry has been facing stiff
competition from other sectors for
hiring and keeping talent.
Retain employees and develop
leaders using an all-encompassing
approach. Design a robust and
comprehensive onboarding process
with a good mix of practical training
and classroom sessions to give
employees the right skills early in
their career.
Align rewards and compensation to
be competitive with other manufacturing
industries and service sectors. Offer
faster career progression and a rich
on-the-job learning experience.
Government imperatives
In addition to playing a direct role
in generating demand for cement by
stimulating infrastructure creation, the
government also has a supporting role
to play by helping the industry achieve
the objectives.
Rationalize tax structure for cement
and other input materials. Doing so
will help make the industry more cost-competitive.
Two moves are essential:
Streamline excise duty and VAT on the
input materials by giving the cement
industry ‘infrastructure’ status. Reduce
the import duties on coal and gypsum,
given shortages.
Streamline land acquisition process
for Greenfield expansion. Reduce
minimum no-objection requirements
to ensure smooth approval.
Re v i s i t s p e c i f i c a t i o n s f o r
infrastructure projects. Evaluate the
use of cement or concrete in roads and
canals from a lifecycle cost perspective,
and encourage adoption.
Allow infrastructure projects to use
blended cement. Agencies such as
the NHAI, PWDs, the Ministry of Water
Resources, and railways should allow
blended cement for large infrastructure
projects.
(Concluded)
(Courtesy: A T Kearney-CII)
Vision Objective
Support the building of
modern India
*Ensure viability of new capacity addition
*Debottleneck input resources to enable growth
*Promote global best practices in use and delivery of cement
Secure a cost-effective
supply of future energy needs
while becoming a world
leader in sustainability
*Reduce energy requirements
*Increase adoption of cleaner sources of energy
*Debottleneck supply of domestic coal while maximizing use of petcoke
Become one of the most
admired industries among the
core sector
*Ensure strong focus on employee welfare and retention
customized for specific customer
applications and requirements. Invest
in RD to support the development of
such performance-focused cement.
Promote adoption of 56-day
concrete strength as a design
parameter instead of 28 days for
applications where 28-day strength is
not relevant. This would help increase
the adoption of blended cement, as
56-day strength blended cement is
on a par with OPC.
Ensure better collaboration
between cement companies and
end users to enable optimal usage
of cement, with the right grade of
cement used for each application.
For example, low-strength cement
would suffice for plastering.
Strive for blended cement to be
included in project specifications.
During the early stages, work closely
with influencers such as the NHAI
for highway projects, PWDs for
urban roads and flyover projects,
the Ministry of Water Resources for
irrigation canals, and railways for all
rail projects to ensure that blended
cement is included in the project
specifications.
2: Debottleneck input
resources to enable growth
Proactively address logistical
bottlenecks. Invest in supporting
such as white topping (laying a
concrete layer on top of existing
asphalt and bituminous roads)
as a low upfront investment that
increases the life of the road and
reduces maintenance costs. For
state and national highways, increase
awareness among stakeholders about
the benefits of concrete roads.
Pursue building of concrete
irrigation canals. As is true for roads,
using cement for canals has many
benefits. Maintenance costs are
much lower than for conventional
canals, the lifespan is longer, and
the amount of water conserved is
significantly higher.
Pursue this agenda, and roll out
campaigns to increase the awareness
of the benefits of using cement in
canal linings. Persuade the relevant
authorities to comprehensively
evaluate the benefits of cement-lined
canals over the entire lifecycle.
Introduce and offer new value-added
or appl icat ion-or iented
products. Increase the indus¬try’s
ability to serve institutional cement
buyers and retail clients. A key
differentiator for cement companies
will be offering customized and
value-added products: Provide
technical solutions and customized
products.
model such as the Chinese model
of replacing old machinery with new
should be followed to have the most
environmental friendly and efficient
manufacturing plants.
Reduce clinker factor by 7 to 8 per
cent. Reduce the use of clinker per
ton of cement from its current value of
0.73 to 0.67 by adopting the following
measures:
Increase blending of fly ash in
PPC from the current average of 27
per cent. Increase blending of slag in
PSC from the current average of 40 per
cent. Use low-grade limestone (PLC).
Use alternative blending materials
such as copper slag, lead-zinc slag,
and other materials generated from
non-ferrous industries.
5: Increase adoption of
cleaner sources of energy
Reduce energy use by 12 to 15
per cent. Reduce energy use by
using cleaner sources. Prepare for
greater use of alternative fuels and
raw materials, and aim for 12 per
cent of thermal energy to come from
alternative fuels.
Adopt c l eane r proc e s s ing
techniques. Continue to improve on
reducing both thermal and fuel NOx
emissions from cement kilns. Minimize
the oil-equivalent consumption of the
overall cement manufacturing process
9. July 07-13, 2014 9
EQUIPMENT
RSB bags Outstanding Performance Award
Metso to supply grinding
media in N Africa
New sales office for
Ruukki in the ME
M Sankaranarayanan, President , and Md Jawed, VP, Business Development, CMI Vertical,
RSB, receiving the award from Michael Hayes J, Site Purchasing Manager, Building Construction
Products, Global Supply Chain and Annamalai Thiruvengadam, Sourcing, Caterpillar India
end loader and backhoe loader for
Caterpillar India.
SK Behera, Vice Chairman
Managing Director, RSB Group, said,
“Customers’ CARE(Customers Are
Really Everything) and delight are our
Grove rough-terrain cranes
on Euro 1.4 b Algerian rail project
A team of 18 Grove rough-terrain
cranes is building a 130 km rail line
in Algeria, which includes 31 bridges
and three tunnels. The cranes will work
every day for five years in tough desert
conditions, where temperatures can
reach up to 40oC and the rainy season
lasts half the year. Total value for the
project is an estimated €1.4 billion.
Italian rental giant O.MEC srl
supplied all of the Grove cranes to
the project’s main contractor, Condotte
d’Acqua S.p.A, a leading Italian
construction company.
The Grove rough-terrain cranes are
so integral to the project that O.MEC is
also providing comprehensive training
to all 120 crane operators involved
in the project, and has established
a repair workshop and spare parts
warehouse on the job site to keep
the 26-strong Grove fleet operating at
their peak throughout the challenging
project.
O.MEC worked closely with Grove’s
Italian dealer FIMI and Manitowoc
Crane Care to ensure it delivers a
comprehensive package of cranes
and support to the prestigious project,
as Gianfranco Bronzini, founder and
owner of O.MEC, explains.
“Such a huge project in a
challenging environment needs special
attention and the right equipment,” he
says. “We have used Grove cranes
from Caterpillar India
CMI Ver t ical (Cons t ruct ion
Equipment, Mining Infrastructure)
o f t h e Dharwad-based RSB
Transmissions (I) Ltd, has been
c o n f e r r e d w i t h p r e s t i g i o u s
Outstanding Performance Award
for 2013-14 from Caterpillar India, a
leading global OEM in construction
equipment.
The award was received by M
Sankaranarayanan, President, and
Md Jawed, Vice President- Business
Development, CMI.
At a recent function in Chennai
the award was presented by Michael
Hayes J, Site Purchasing Manager,
Building Construction Products,
Global Supply Chain, Caterpillar
India and Annamalai Thiruvengadam,
Sourcing, Caterpillar India, in
presence of top global officials from
Caterpillar, who came from USA to
facilitate the star vendors excelling
in performance in terms of quality,
delivery(velocity) and New Product
Improvements(NPI).
RSB CMI Vertical is favoured by
vendors for supply of construction
equipment aggregates like frames,
boom, arms for excavator, front-
for many years and they have proven
to be the strongest and most reliable
machines around. There’s also a
wide range of capacities and options
available. Plus, our close relationship
with Manitowoc’s Italian office and FIMI
gave us the confidence and support
that we could deliver what this project
needs.”
All 18 Grove cranes are constantly
in use at the project. They travel along
the 130 km stretch of new railway
to perform a huge variety of lifts.
Among their main duties is positioning
steel rebar that is used to build the
viaducts.
The Grove rough-terrain cranes at
the project include nine RT540Es, two
RT550Es and seven RT880Es. The
cranes are new or nearly new and offer
capacities from 35 t to 75t, with boom
lengths of up to 39 m.
Another key reason for selecting
Grove rough-terrain cranes for
the project is their straightforward
operation. The Grove RT550E, in
particular, features Manitowoc’s new
Crane Control System, which includes
a boom optimization system that
automatically configures the boom
length to suit specific loads and radii.
The system makes life easier and more
efficient for the operator, as Federico
Lovera, Manitowoc’s EMEA product
manager for RT and truck cranes,
explains.
“Major projects with tight deadlines
in difficult locations put a lot of pressure
on operators,” he says. “We want to
make it easier to use our cranes and
quicker to set-up, even for challenging
lifts. Our robust rough-terrain range is
a perfect fit for this work and we are
confident they will help to complete the
work on schedule.”
A team of highly experienced
trainers led O.MEC’s operator training
courses. The 10-day courses gave
Condotte d’Acqua S.p.A.’s operators
practical and theory training to
ensure optimum use of the cranes.
A maximum of eight people took part
in each training course, to ensure all
120 operators were given one-on-one
attention.
O.MEC. is one of the largest
const ruct ion equipment rental
companies in Italy and has more than
20 years’ experience in the industry.
The company’s fleet includes more
than 40 Grove rough-terrain cranes
and a 400 t capacity Grove GMK6400
all-terrain crane.
The new railway line in Algeria will
run between Tlelat and Tlemcen in the
north of the country, near the Moroccan
border. The ambitious project includes
building three tunnels, 31 bridges and
viaducts, and renovating three railway
stations.
prime focus and the parameters of
performance in quality, delivery and
continual innovation is engraved in
our system with strict compliance to
‘nil’ deviation”.
RSB Group is a forerunner in the
construction equipment aggregates
manufacturing industry in India and
overseas as a one-stop solution. It
is a preferred source of construction
equipment OEMs. RSB serves as a single
source to many domestic customers
and managing their supply chain.
It has standalone plants in India
catering to OEMs at Jamshedpur,
Dharwad and Chennai – all of which
have dedicated single window for all
CE solutions.
RSB is one of the leading
global engineering institutions with
turnover in excess of Rs 1,400 crore,
manufacturing a wide range of
products -- propeller shafts, steering
systems components, transmission
components assembly, automotive
components, etc and construction
equipment aggregates, operating in
several countries.
Metso has recently demonstrated
its position as the leading supplier
of grinding media in North Africa by
securing a six-month long grinding
media order to a gold mine in Egypt.
The value of the order exceeds Euro
5 million.
“Our comprehensive value adding
services packages will materially
improve the productivity of our
customers’ processes and their
overall performance. The quality of our
grinding media will lower both the wear
rate of the grinding media as well as
the operative costs for the customer,”
said Rodrigo Gouveia, SVP, Wears
Solutions, Services business line,
Mining and Construction, Metso.
The order is booked on Mining
and Construction’s Q2 2014 orders
received.
Metso entered the grinding media
business by acquiring the Spanish
grinding media supplier Santa Ana
de Bolueta SA (Sabo) late 2013. The
acquisition complemented Metso’s
current comminution wear parts
offering for mining customers and
helps us to gain a better overall control
of mill performance.
“The integration of Sabo into
Metso has progressed well. We are
currently expanding our grinding
media factory in Bilbao to better
meet the market demand,” said
Felix Fornaguera, VP, Grinding media
solutions, Services business line,
Mining and Construction, Metso.
Grinding media is used inside
grinding mills to improve the efficiency
of the grinding process. Sabo’s
offering covers grinding media for
SAG, ball mill and VertimillTM grinding
applications as well as bars for rod
mills. These are available in different
diameters and materials to guarantee
the best performance for the mineral
to be processed.
Thomas Hörnfeldt, SVP, Special Steels
International Sales at Ruukki Metals
Ruukki is expanding its sales
network in the Middle East by opening,
in June 2014, an office in Dubai, United
Arab Emirates. The new sales office
is in line with Ruukki’s aim to increase
the share of special steel products and
develop its distribution and partnership
network and provide a faster and more
flexible service, together with technical
support.
The Dubai sales office will cover
the entire Middle East, as well as
Pakistan. Ruukki is looking forward to
strengthening its offering and service
across the entire region.
“Ruukki’s new sales office will offer
more comprehensive range of special
steels. Ruukki is also seeking a strong
position in developing sales to, for
example, trailer manufacturers in the
Middle East,” says Thomas Hörnfeldt,
SVP, Special Steels International
Sales at Ruukki Metals.
Ruukki is also present in the Middle
East through its Certified Partner
Steelforce, who currently distributes
Ruukki’s special steels through its
network and stocks in the area.
10. REAL ESTAET July 07-13, 2014 10
Greatest challenge to Indian cities
Cities have faced global
criticism for being less
competitive in terms of
tax structure, corporate
governance and internal
security
Asian economies compete for
greater global influence in terms of
business, politics and sociocultural
activity. Within economies, cities are
the real growth engines. According to
the Economic Intelligence Unit’s Hot
Spots 2025 (2013) and AT Kearney’s
2014 Global Cities Index Emerging
Cities Outlook, leading Indian cities
have done well in terms of growing
business activity and enhancing
human capital.
This is largely a consequence of
efforts by Indian authorities toward
embracing free trade and installing
an effective tertiary education system.
A 25 per cent annualised growth in
stock of office space in top seven
cities during the past 10 years is
testimony to rising business activity.
The greatest challenge facing
Indian cities is to increase their
This would boost growth in
Banking, Financial Services
Insurance (BFSI) sector, the third-largest
occupier of commercial
space in India. With a low mortgage-to-
GDP ratio in India (India 10%;
Hong Kong and Singapore 40%),
increased financial maturity could
also strengthen the housing market.
I n s t i t u t i o n a l c h a r a c t e r : I n
the past few years, cities have
faced global criticism for being
less competitive in terms of tax
structure, corporate governance
and internal security. Institutional
character directly influences business
confidence, critical for real estate
competitiveness in Asia. The above-mentioned
reports highlight some
focus areas. With the newly elected
BJP government at the Centre, it is
time we look at these factors and their
property market implications.
Physical capital: Infrastructure is
deficient in India, and analysts suggest
this negatively affects economic
activity (GDP) by 2 percentage points
annually. Planned infrastructure
development could help Indian cities
quickly attract international investors,
and entice foreign workers.
For instance, during 2006-08,
quarterly growth in demand for
office space in Gurgaon and Noida
(part of NCR-Delhi) was more than
double its long-term average figure,
as Metro rail connectivity was being
established with Delhi.
Pol i t i c a l a c t i v i t y : Pol i t i c a l
engagement with foreign nations
facilitates the growth of trade and
commerce, di rect ly favour ing
commercial real estate. India’s strong
relationship with Japan resulted in
cumulative developmental loans
from the latter, growing at a CAGR
of 16 per cent per annum in FY2001-
FY2013. The 12th Five-Year Plan
indicates that India needs overall
investments worth $1 trillion for
infrastructure development, and such
foreign participation is important to
accomplish this goal.
Financial maturity: While financial
governance, bank penetration and
equity participation is satisfactory,
Indian ci t ies can signi f icant l y
improve financial product awareness
(insurance, mutual funds, etc.) and
introduce new investment tools
(inflation-hedging bonds, Reits,
etc).
sector development. Additionally,
instruments such as Reits thrive on
robust tax and legal structures.
Environment issues: Profit seeking
and environment concerns have
conflicting motives, and a balance
between the two is needed for long-term
sustainability of competitiveness.
Recently, Indian authorities have
been struggling to maintain balance,
particularly affecting civil aviation,
mining, manufacturing and real
estate sectors. Diligent action on
these policies could unlock large-scale
real estate developments
around upcoming projects without
compromising the environment.
Prime Minister Narendra Modi
demonstrated an ability as Chief
Minister of Gujarat to deliver action
wi th speed ( less bureaucrat i c
hurdles), clarity (unambiguous
policies) and innovation (practical
solutions to complex problems). This
gives us hope that his government
will pull up the competitiveness
ranking of Indian cities, eventually
benefiting real estate.
Suvishesh
Valsan
Senior Manager,
Research, JLL India
PCMC – a blueprint
for smart growth
The Pimpri Chinchwad
Municipal Corporation
is an acknowledged
masterpiece of
community-oriented real
estate development
What is it about Pimpri Chinchwad
and its township properties that are
so different from what is happening
in the rest of the Pune property
market? To understand this, one has
to first understand what goes into the
formation of a planned city.
The immaculatel y planned
residential areas that define the Pimpri
Chinchwad Municipal Corporation’s
real estate map are not an accident.
They are the result of carefully planned
social, economic and real estate
growth.
Unlike the central areas of Pune,
the real estate market in PCMC has
been scrupulously shielded from the
central city’s ad hoc development
style. The vigilance and futuristic
thinking that went into this avant-garde
satellite city have added a completely
new dimension to the concept of
residential properties in Pune.
Organized urban planning
From the very outset, the PCMC
planning authorities were determined
to avoid the mistakes committed
in nearby Navi Mumbai, popularly
known as the world’s largest planned
township. After all, what began
as regulated development in Navi
Mumbai soon began giving way to
commercialized expansion.
Instead, PCMC adopted a blueprint
for smart growth – a blueprint that
placed utmost importance to organized
urban planning. No scope was given to
a near-sighted focus on capitalization
on this new area’s development
potential – the onus was firmly kept
on long-term considerations.
This was to be the city of the
future – a place where residents could
work, live and relax without any of the
constraints that plague the rest of
Pune. Slowly, almost imperceptibly, the
landscape of this previously ignored
satellite city changed. Proposals for
faster development were turned down.
The master plan stayed in place, and
the results are now brilliantly evident.
Today, the Pimpri Chinchwad
Muni c ipal Corporat ion i s an
acknowledged masterpiece of
community-oriented real estate
development. It has a unique blend of
sustainable residential spaces, highly
advanced transportation networks,
a broad spectrum of employment
opportunities, modern housing
typologies such as township properties
and superior supportive infrastructure.
At every stage of planning, this city’s
inherent natural, cultural, sociological
and economic resources have been
carefully preserved.
Perfect alternative
This incredible growth area is now
the most logical option for residential
property in Pune today. For home
buyers, PCMC is the prefect alternative
to Pune’s unregulated urban sprawl,
rapidly compounding traffic congestion
and disconnected neighbourhoods.
Consider ing the increasing
evidence if rapid urban decay in
central Pune, township properties such
as those now coming up in Pimpri
Chinchwad Municipal Corporation are
truly the New Residential Deal.
However, PCMC is not only about
wider, greener spaces, cheaper
property rates, improved social
fabric and better infrastructure. The
establishment of such new growth
areas, with modern residential
alternatives such as township
properties, is a blessing to the Pune
real estate market (which has been
stagnating within increasingly larger
pockets). At first sight, they only seem
to play a role in reducing the urban
sprawl and offering home buyers
a healthier and more comfortable
lifestyle.
These townships are al s o
instrumental in creating new urban
centres, wherein new business districts
create job growth in new directions.
Thanks to the organized nature of
their development, they create new
and more rational scope for real estate
market expansion while reducing
pressure on property prices in the
parent city.
Anil
Pharande
Chairman, Pharande
Spaces, Pune
Industry hopes in govt to
overhaul property market
The real estate, after witnessing
some serious economic headwinds
and sluggish demand over the past
two years, real estate industry is
hoping that the stable government
at the Centre would rejuvenate the
property market in the upcoming
Budget 2014-15.
The sector is looking forward
to a number of policy initiatives,
including a review of the FDI rules
in housing, Reit legislations and
effective implementation of the Real
Estate (Regulation and Development)
Bill. The long-awaited infrastructure
status and single window clearance
system are the other significant issues
that the new government will have
to look into according to industry
players
Real tors apex body Credai
Chairman Lalit Jain said, “The focus
of the government should be on
quick result factors to grow GDP and
employment. Granting infrastructure
status, necessary fiscal reforms,
providing home loans at 7.5 per cent
by tax free housing bond at 5 per cent,
Reit and affordable housing scheme
are quick measures suggested in
this budget.
Expressing similar views Omaxe
CEO Mohit Goel, said, “We expect
the Budget to grant infrastructure
status to real estate sector with single
window clearance, tax incentive
for affordable housing, removing
roadblocks in land acquisition bill,
faster approvals, interest subvention
for affordable housing up to Rs 40
lakh, etc are some of the short-term
measures that can be taken. In the
government’s agenda of building 100
smart cities, the private developers
can be expected to play a greater
role.”
Supertech CMD RK Arora said,
“Though 100 per cent FDI is permitted
through automatic route in the sector,
much more needs to be done like
provision of single window clearance,
giving the sector ‘industry’ status
and facilitating Reits, etc to ensure
completion of projects in time and
in a transparent manner which only
will bring about confidence in foreign
investors, “ he said.
“We are confident that the present
government will take proactive
measures with the view to ease inflow
of foreign money in real estate which
would ultimately improve liquidity in
all spheres of trade and industry,” he
added.
The realty sector has been facing a
huge slowdown in demand over past
few years due to high interest rates
on home loans and lower economic
growth. Gaursons MD Manoj Gaur
said, “The Union Budget 2014-15
is expected to be a Budget of hope
after the dull and average previous
year (2013) for the real estate industry.
Now a stable and full majority led NDA
government is at the Centre and we
expect the inflation to be controlled in
2014.” “I firmly believe easy licensing
or single window clearance system
should be introduced by the new
regime. Though a necessary breather
was given by RBI last year by keeping
the rates unchanged and it is expected
to remain so this year too.
“Also a new clear policy on Reits
(Real Estate Investment Trust) and
inflows is expected. This will help
developers to arrange funds for
projects. The government should raise
tax exemption limit for interest payment
on housing loan from the existing Rs
1.5 lakh to Rs 2.5 lakh per annum,”
Gaur added.