ECONOMIC AND INDUSTRY OUTLOOK
Indian Construction Industry was almost similar to the construction industry evolution in other countries: founded by Government and slowly taken over by enterprises. After independence the need for industrial and infrastructural developments in India laid the foundation stone of construction, architectural and engineering services.
The objective of such an imposition was to develop local design capabilities parallel with the inflow of imported technology and skills. This measure encouraged international construction and consultancy organizations to set upjoint venturesand register their presence in India.
In India Construction has accounted for around 40 per cent of the development investment during the past 50 years. Around 16 per cent of the nation’s working population depends on construction for its livelihood. The Indian construction industry employs over 3 crore people and creates assets worth over20,000 crore.
Total sales of construction industry have reached 42,885.38 crores in 2004 05 from21,451.9 crores in 2000-01.
The Indian construction industry comprises 200 firms in the corporate sector. In addition to these firms, there are about 1, 20,000 class A contractors registered with various government construction bodies. There are thousands of small contractors, which compete for small jobs or work as sub-contractors of prime or other contractors.
– POLITICAL FACTORS
SEZ Act to Boost Infrastructural Development:
SEZ is the new destination for real estate investors. Currently 150 SEZs are approved out of which 85 SEZs are in the IT/ITES area and 10-15 SEZs in the electronics area.130 SEZs are developed by real estate developers which constitute of about 50% of the total SEZ area. IT SEZ should be developed and made operational within the period of six months from the date of notification. Thus, 130 approved SEZs would result in investment of US$10 bn to US$ 12 bn immediately.
Cement Prices Reduced for State Infrastructure Projects
The continued thrust on infrastructure development will provide impetus to the healthy growth in demand, protecting the bottomline of cement companies to an extent. The reduction in the CST and in freight rates on diesel and limestone will be marginally positive for some companies.
FDI Liberalization to Augment Industry Growth
Recent amendments by the government have made accessibility to the required capital much easier. Opening of FDI in construction and allowing developers to raise capital in international markets has led to developments of larger projects benchmarked against international standard
REITs to Positively Affect Real Estate Business
The proposed introduction of REMF (Real Estate Mutual Fund) and REIT (Real estate Investment Trust) will boost real estate investments from the small investor’s point of view. This will allow small investors to enter real estate market with contribution as less than Rs 10,000. The concept of REIT is on the verge of entering
India and would be structured as a company dedicated to owning and in most cases operating income producing real estate such as apartments, shopping centers, offices & warehouses.
– ECONOMIC FACTORS
Growth in Construction Activity Stimulating GDP Growth
India is witnessing tremendous growth & expansion of construction activities and construction is largest component of GDP. It has been growing at a rate over 10% in the past few years when GDP growth is around 8%.Within construction; sectors such as roads, railways, housing and power have been keen drivers.
Rate Hikes Unlikely To Slow Down Growth
It has been analyzed that residential prices have increased by about 15- 20% on average in the last one year. There has been strong growth in demand supported by rising disposable incomes, low interest rates, and fiscal incentives on both interest and principal payments and increasing urbanization.
– SOCIAL FACTORS
Shifting Consumption Pattern to Fuel Industry Growth
The consumption pattern of Indian households is undergoing a gradual, but steady change. The share of food and beverages, which used to constitute almost 50% of household spend until 2003 is expected to fall to 45% by FY08. We expect the share of discretionary items to consistently rise given the rising affordability and changing aspiration levels. Increased exposure to western lifestyles (through media as well as overseas travels) has altered the consumption pattern of Indian people.
Rising Urbanization to Boost Industrial Growth
Urban infrastructure consists of drinking water, sanitation, sewage systems, electricity and gas distribution, urban transport, primary health services, and environmental regulation. Many of these services are in the nature of ‘local’ public goods with the benefits from improved urban infrastructure. The urban population in India will grow by 85 million over the next 10 years.
Green buildings in India
The green building movement has gained tremendous momentum during 3 to 4 years, ever since the Green Business Centre embarked on achieving the prestigious LEED rating for their own centre at Hyderabad. The Platinum rating for green building has sensitized the stakeholders of construction industry. There is tremendous potential for construction of green buildings in India. The estimated market potential for green building will be about $ 400 million in 2010.There will be favorable policies of the government would provide the right impetus for advancing the green building movement in India.
– TECHNOLOGICAL FACTORS
Low Technology Adoption to Hinder Growth
The poor state of technology adopted by the construction sector adversely affects its performance. Upgrading of technology is required both in the manufacturing of construction material and in construction activities. As a large number of construction materials are manufactured in the unorganized sector, effective monitoring and regulation of the production of these materials to ensure proper quality becomes difficult. Use of low-grade technology in the construction sector leads to low value addition and low productivity, apart from poor or substandard quality of construction and time overruns in projects. The non-availability of quality construction tools is the main reason for this. Besides, the construction sector also lacks information about new technology.
Construction as per Indian Requirements
The construction needs to be done as per Indian standards and requirements which will demand considerable changes form the international requirements. The infrastructure requirements of India are much different as the population spread, increasing urbanization, increasing slums, the small space for roads, the water problems are more.
Ready-Mix-Concrete Being Experimented With
The Ready mix concrete business in India is in its infancy. For example, 70% of cement produced in a developed country like Japan is used by Ready Mix concrete business there. Here in India, Ready Mix concrete business uses around 2% of total cement production.
Much of construction done in India is very slow paced. The concrete making process at site takes much time with variation in quality. The increasing use of ready mix not only saves on time but allows the better quality. It will also eliminate the storage space at site, eliminate Procurement / Hiring of plant and machinery, reduce wastages of basic material, noise and dust at site will be reduced. Also organization at site will be streamlined. This will improve the rate at which infrastructure can be built in India.
Lanco is one of the fastest growing Integrated Infrastructure Enterprises of India, operating across a synergistic chain of Strategic Business Units (SBUs) comprising Power, EPC, Construction, Renewable, Resources, Non-Power Infrastructure, Property development and CSR.
Lanco Infratech Ltd’s current market capitalization is approximately Rs. 15,000 Crores (USD 3.33 billion). Out of the total Share Capital, the promoters’ holding is about 68 %. The gross revenue of Lanco as on March 2010 was over Rs. 8200 Crores (USD 1.8 billion).
Lanco is fast emerging as one of the top three private sector power developers in India with 2092 MW under operation, 7153 MW under construction, and 11070 MW of projects under development.
In a strategic move that provides increased fuel security for its current power generating assets and its future power portfolio expansions, Lanco through its step down Australian subsidiary, Lanco Resources Australia, has acquired Griffin Coal Mining Company and Carpenter Mine Management. Griffin coal, based out of Collie in Western Australia, owns the largest operational thermal coal mines in Western Australia, producing over 4 mtpa of coal which can be ramped up to over 15 mtpa in the near term, post development of evacuation infrastructure.
Lanco has strategic global partnerships with top-notch companies which include: Genting, Harbin, GE, Dongfang, Doosan etc. Today, Lanco is one of India’s largest Power Traders in the private sector.
A people driven organization, Lanco operates from 20 States in India and has international operations in Australia, China, Indonesia, Nepal, Singapore, United Kingdom and USA with a human resource base of about 6500 people. Lanco has an Order book of Rs 25,425 Crores as of September 2010. Lanco is also a privileged member to the World Economic Forum and it has been acknowledged as an elite member of the top two hundred “Global Growth Companies”.
As part of its business strategy, the company has chalked out an ambitious growth plan – Lanco’s Vision 2015: to build a High Performance Organization with an operating capacity of 15000 MW in Power. Lanco also envisages aggressive growth plans for EPC with a strong Order book growth.
VISION OF LANCO
An India without poverty, where the internationally agreed millennium development goals are met and people with dignity and respect, using their full potential to access the opportunities and exercise choices for their own development -a society that constantly moves to inspire people.
MISSION OF LANCO
To work towards developing rural and urben communities in order to reduce poverty and contribute effectively towards reduction in loss of environment resources.
To improve human development indices through projects and programs at the local, state and national level.
Development of society through enterpreneurship
Most admired integrated infrastructure enterprise
VALUES OF LANCO
We choose to be honest in all our Business Interactions and Transactions and remain steadfast even when challenged. We strive for consistency between – what we think, what we Say and what we do.
Humility & Respect
We are consistently humble in our approach to and interactions with people. We treat every person with respect at all times, unconditionally.
Organisation Before Self
We recognize that organization interest is supreme, above individual preferences and goals. In all our decisions, actions and dealings we put the Organization before self.
We have an urge that drives us to intensely focus on performance and act decisively with high energy to achieve the desired results. We strive to continuously learn and consistently set higher Standards of Excellence.
We own up to our words, actions and outcome.When we commit to do something, we own it and we do it – decisively and responsibly.
We work harmoniously with a shared vision, energized by our collective talent. We Trust, Listen to, Share with and Empower team members and take collective responsibility for the results.
EPC-World Awards 2010
for “Outstanding contribution in Power & Energy sector (Generation)”.
8 th Construction World- Annual Awards 2010
for Fastest Growing Construction Company (Large Category)- 1stRank
7thConstruction World- Annual Awards 2009
for Fastest Growing Construction Company (Large Category)- 3rdRank
Aban Power Company Ltd
TERI Corporate Award for “Environmental Excellence and Corporate Social Responsibility” June 2009.
IEEMA award for “Excellence in Fast Track Commissioning of Small Hydro Projects” February 2009
PRSI Confers Golden Jubilee Award
for the “Most Impressive Public Relations Initiatives” August 2008
Clarion Power Corporation Ltd
FAPCCI Award for Excellence in Renewable Energy 2007.
Construction World NICMAR Awards 2007
for the Second Fastest Growing Construction Company (Medium Category) in India.
LANCO Institute of General Humanitarian Trust (LIGHT)
TERI Award 2006-07 for Excellence in Corporate Social Responsibility.
PRSI National Award for House Journal (English) – First Prize
PRSI Confers Golden Jubilee Award
for the “Most Impressive Public Relations Initiatives”
Award for Excellence in Bridge Engineering 1999
from the Indian Institute of Bridge Engineers.
- Employment and training opportunities in the field of construction.
- Private sector housing boom and commercial building demands Construction of the multi building projects on the feasible locations in the country.
- Good structured national network facilitates the boom of construction industry.
- Low cost well- educated and skilled labour force is now widely available across the country.
- Sufficient availability of raw material and natural resources in the country is supportive for the industry.
- Real estate development is on high and it is attracting the focus of the industry towards construction.
- Distance between construction projects reduces business efficiency.
- Training itself has become a challenge.
- Changing skills requirements and an ageing workforce may emphasize the skills gap.
- Improvement in long-term career prospects is highly required to encourage staff retention and new entrants.
- External allocation of large contracts becomes difficult.
- Lack of clearly defined processes and procedures for construction and its management.
- Huge amount of money needs to be invested in this industry.
- Continuous private sector housing boom will create more construction opportunities.
- Public sector projects through Public Private Partnerships will bring further opportunities.
- Developing supply chain through involvement in large projects is likely to enhance the chances in construction.
- Renewable energy projects will offer opportunities to develop skills and capacity in new markets.
- More flexible training delivery techniques are now available.
- Financial supports like loan and insurance and growth in income of people is in support of construction industry.
- Long term market instability and uncertainty may damage the opportunities and prevent the expansion of training and development facilities.
- Current economic situation may have an adverse impact on construction industry.
- Political and security conditions in the region and Late legislative enforcement measures are always threats to any industry in India.
- Infrastructure safety is a challenging task in construction industry.
- Lack of political willingness and support on promoting new strategies.
- Natural abnormal casualties such as earth quake and floods are uncertain and can prevent the construction boom.
- Inefficient accessibility in planning and concerning the infrastructure.
- Competitors are emerging in the industry by leaps and bounds.
To Start with, the historical growth of vehicles is examined based on the traffic surveys conducted in the past along the study corridor. Having examined the accuracy and reliability of data, we further analyze the motor vehicle registration statistics at the state level to establish a relationship between the economic variables and the registration data, as a proxy for the traffic growth.
The relationship provides the elasticity values by vehicle type, which are then compared with the results of other studies of similar nature carried out in the recent past. The comparative picture provides us the required validation and modification of the estimated elasticity values.
Finally, based on the future economic growth prospects in terms of income growth, per capita growth and population growth are considered for estimating the future traffic growth rate by vehicle type.
Traffic Studies are carried out:
- To obtain the knowledge of the type and volume of traffic at present and to estimate future traffic that the road is expected to carry.
- To determine the facilities provided on the roads such as traffic regulation and control, intersections, so that improvement on the basis of traffic density may be carried out.
- To design the geometric features and pavement thickness on the basis of traffic surveys.
- Traffic survey and studies are done as a part of the study to assess the base year traffic pattern.
Different traffic studies :
- A comprehensive 7 day traffic volume count at toll plaza locations.
- Origin-destination (OD) survey at 2 suitable locations.
- A comprehensive 1 day number plate registration survey at toll plaza locations.
- Comprehensive surveys between the alternate routes covering both existing and future responsibilities.
- Calculation of:
- Average daily traffic (ADT).
- Annual average daily traffic (AADT) considering the seasonality variation.
A comprehensive 7 day traffic volume count at toll plaza locations:
The main objective of classified traffic volume count was to access the traffic characteristics on project road section in terms of hourly variation, peak hour traffic, average daily traffic, traffic composition and directional distribution. The survey was carried out by vehicle counting and classifying the vehicle passing the survey station. The counts were made separately for motorized and non motorized vehicles. In addition toll exempted vehicles i.e. government, ambulance, fire vehicles etc. were classified separately.
Traffic Volume is the number of vehicles crossing a section of road per unit time at any selected period. The commonly used units are vehicles per day and vehicles per hour.
The various methods available are:
- Manual methods
- Combination of manual and mechanical method
- Automatic devices
- Moving observer devices
- Photographic methods
Generally manual method is used. This method employs a field team to record traffic volume on the prescribed record sheets. In this method the fluctuations of traffic volume during the hours of the day and the daily variations are observed.
Origin-destination (OD) survey at 2 suitable locations:
Origin and Destination survey for road section was obtained by carrying out by police assistance. Data of origin and destination of the trip was collected in the survey; a zoning system was order to analyze the origin destination data. Origin destination data was used to identify the zones that contribute to the traffic on the road.
Growth of traffic on the road will depend upon the economic developments in the influence areas of the road.
TheOrigin -Destination survey was carried out with the primary objective of studying the travel pattern of passenger and goods traffic along the study corridor.
The results of this survey forms a useful input for estimating the growth rates for traffic projections, identification of toll plaza location and planning for toll collection system.
The various applications of OD survey may be summed up as follows:
- To locate expressway or major routes along the desire lines.
- To judge the adequacy of parking facilities and to plan for future.
- To locate intermediate stops of public transport.
- To establish preferential routes for various categories of vehicle including by pass.
Methods for collecting the OD survey data:
- Road-side interview method
- License plate method
- Return post card method
- Tag-on-car method
Generally road-side interview method is used in which vehicles are stopped at previously decided interview stations by a group of persons with the help of police assistance and the answers to prescribed questionnaire are collected on the spot.
A comprehensive 1 day number plate registration survey at toll plaza locations:
Registration plate survey is carried out at all toll plaza locations to know that how much traffic is influenced by the local traffic. Because if the person is staying inside the radius of 20 kms from the toll plaza location then he has to pay only 50 percent of the toll tax according to the government policy.
Comprehensive surveys between the alternate routes:
The main objective of this survey is to analyze the alternative routes and leakage of traffic on the project road because it will directly affect your toll revenue.
Average daily traffic (ADT):
Average daily trafficorADT is the average number ofvehiclestwo-way passing a specific point in a 24-hour period, normally measured throughout a year. ADT is not as highly referred to as the engineering standard ofAADTwhich is the standard measurement for vehicle traffic load on a section of road, and the basis for most decisions regardingtransport planning, or to the environmental hazards of pollution related to road transport.
Annual average daily traffic (AADT):
Annual average daily traffic or AADT is a measure used primarily intransportation planningandtransportation engineering. It is the total volume of vehicle traffic of ahighwayorroad for a year divided by 365 days. AADT is a useful and simple measurement of how busy the road is. It is also sometimes reported as “average annual daily traffic”. One of the most important uses of AADT is for determining funding for the maintenance and improvement of Highways. AADT is calculated by multiplying Seasonal variation factor in ADT.
Formula for calculating Annual average daily traffic (AADT) from ADT is as under:
Annual average daily traffic (AADT) = Factor * Average daily traffic
Seasonal Variation of traffic (correction factor)
The flow of traffic on the road varies significantly during different months of the year. As monthly flow data is not available, petrol and diesel sales are collected from petrol stations along the highway to calculate the correction factor. This data is analyzed compared to the month of ADT the annual average variation factor valuated to arrive at AADT from ADT as recorded.
REASEARCH AND FINDINGS
For completion of the project “Strategies involved in opting an infrastructure project (highway) through traffic study” The aim of the project is to analyze and interpret the traffic study reports based on which highway projects are bid. Interpretation of the report is very critical as it helps in assessing the revenue generation for the entire concession period, based on which a bid is made.
In order to complete my project, I was asked to thoroughly analyze the report on “Kota-Jhalawar road section on NH-12 and Aligarh-Kanpur road section on NH-91”
KOTA-JHALAWAR ROAD SECTION ON NH-12
Proposed number and locations of traffic survey stations have been identified after detail reconnaissance. The Traffic Engineer has trained the post-in-charges and monitors the training of surveyors by them. Survey and count sheets have been spot checked on a regular basis and data registered in the field office. Data to be collected from includes:
The type of traffic surveys and the minimum number of survey stations were as under:-
Number of Survey stations
per 100 Km
|1||Classified Traffic Volume Count||3|
|2||Origin-Destination and Commodity
|3||Axle Loading Characteristics||2|
|4||Intersection Volume Count||All Major Intersection|
|5||Speed-Delay Characteristics||Project Road Section|
|6||Pedestrian/animal cross traffic count||All major in habilitations all
along the highway
CLASSIFIED VOLUME COUNT
The classified traffic volume count surveys have been carried out for 7 days (continuous, direction-wise) at the selected survey stations indicated below. Keeping in view the vehicle classification system given in IRC codes (IRC 9 – 1972, IRC SP: 19 – 2001) the following generalized classification system have been used in recording the classified volume count.
Motorized Traffic Non-Motorized Traffic:
- 2-Wheeler Bi-Cycle
- 3-Wheeler Cycle-Rickshaw
- Passenger Car Animal Drawn Vehicle (ADV)
- Utility Vehicle (Jeep, Van etc.) Hand Cart
- Other Non-Motorized Vehicle
- Truck MCV: 2-Axle Rigid Chassis
- MCV: 3-Axle Rigid Chassis
- MAV Semi
(For Procedure of Traffic Analysis refer Annexure I )
We have carried out O-D and Commodity Movement Surveys at locations given below in accordance with IRC: 9-1972. The roadside interviews were on random sample basis as per TOR. The trip matrices were worked out for each vehicle type information on weight for trucks was summed up by commodity type and the results tabulated, giving total weight and average weight per truck for the various commodity types. The sample size for each vehicle type was indicated on the table and also in the graphical representations. The data derived from surveys has also been analyzed to bring out the lead and load characteristics and desire line diagrams.
Three Locations identified for O-D surveys are as under:-
- Near Kebal Nagar Village(Both Direction) …………………….265.000
- Near Devarighata (Both Direction) ……………………………..320.000
- Near Chandrabhaga river Toll Plaza…………………………..337+500
TURNING MOVEMENT SURVEYS
The turning movement surveys for estimation of peak hour traffic for the design of major intersections were carried out for the Study. The details regarding composition and directional movement of traffic have been compiled.
The methodology for the surveys was in accordance with IRC: SP: 41-1994.
The data derived from the survey was used to analyze and to identify requirements of suitable remedial measures, such as construction of underpasses, flyovers, interchanges, and grade-separated intersections along the project road alignment.
Intersections with high traffic volume requiring special treatments either presently or in future were identified.
Locations comprising major intersections have been identified during detail reconnaissance. Data for turning movement survey is vital in identifying the section for operation as toll road. Details are presented in Annexure to chapter 6.
Identified Location of Turning Movement Count (TMC) stations are as:
- Sangod – Kanwas Junction ………………………………………….291.000
- Chechat – Rawat Bhata Road ……………………………………….304.600
- Link Road of SH – 9A Ram Ganj Mandi ……………………………315.500
- Bagher Mandawar Junction ………………………………………….67+683
- Mandawar Teendhar Junction ………………………………………346+539
AXLE LOAD SURVEYS
The axle load surveys have been done using load cell. The axle load data was collected axle configuration-wise. The number of equivalent standard axles per truck was calculated on the basis of results obtained. The results of the survey have been used for VDF. Furthermore, the data from axle load surveys was analyzed to bring out the Gross Vehicle Weight (GVW) and Single Axle Load (SAL) Distributions by truck type (axle configuration).
Appropriate field studies such as moving car survey to determine running speed and journey speed. The data was analyzed to identify sections with typical traffic flow problems and congestion. Recommendation was made for suitable measures for segregation of local traffic, smooth flow of through traffic and traffic safety. These measures have included the provision of bypasses, under-passes, flyovers, grade separated intersections and service roads. Speed delay survey was done for whole project highway.
TRUCK TERMINAL SURVEYS
The data derived from the O-D, speed-delay, and other surveys was analyzed to assess requirements for present and future development of truck terminals at suitable locations en-route.
ROAD INVENTORY SURVEYS
Detailed road inventory surveys have been carried out to collect details of all existing road & pavement features along the existing road sections. The data collected through road inventory surveys was sufficient to meet the requirements.
The data are presented in the format given as “Road Inventory Data Sheet” (IRC-SP-
The headings are given below.
- Terrain (flat, rolling, mountainous)
- Land Use (agricultural, commercial, forest, residential etc) @ every kilometer;
- Name of Village
- Carriageway width, surfacing type and condition @ every 500m and every change of feature whichever is earlier;
- Shoulder surfacing type and width and condition @ every 500m and every change of feature whichever is earlier;
- Height of embankment or depth of cut @ every 200m and every change of feature whichever is earlier.
- Details of cross road
The data have been collected in sufficient detail, compiled & presented in tabular form. The data have been stored in computer files using utility packages, such as EXCEL etc.
SUBGRADE CHARACTERISTIC & STRENGTH
The testing of soils for classification & mechanical characteristics has been as per terms of reference. “Testing of three sub-grade soil samples for each design section or three