As Mumbai builds infra, companies build order books
Mum ba i’ s struggle to makeup for lost time to build its much-needed infrastructure has translated into a wind fall for construction companies in thecountry.
The financial capital accounts for more than 16 percent of the combined order book of six such companies, the data shows.
A 276- km metro rail network, a link road to connect the island city with its satellite, a road parallel to the city’ s coast, a ch awl redevelopment project and a Ch hat rap at iS hi vajiM ah a ra j Memorial are among those adding to the construction kitty.
“Currently, theme tropolis is witnessing massive infrastructural construction activities across a wide gamut of segments such as metro rail, railways, road sand bridges, housing, water supply and wastewater, and airport. Hence, Mumbai-based projects comprise a size able portion of the outstanding order book of Tat a Projects and other similar players ,” said Rahul Shah, chief operating officer, urban infrastructure, TataProjects.
Tat a Projects is among the six companies building Mum ba i’ s infrastructure and improving city planning.
Larsen& Toubro, Hindustan Construction Company, Reliance Infrastructure, TataProjects, JKumar Inf ra projects and Simplex Infrastructure together have an outstanding order book of ~3.95 trillion. The data was compiled from the latest available company releases and rating agency reports.
At present, these six companies are executing in Mumbai orders worth ~64,134crore, which translates into a little more than 16 percent of the combined order book. The percentage is indicative because their share in the order book of companies is difficult to estimate. Construction companies, based on milestones, execute orders in phase sand account for them.
“This is a rare one-time combination of long-pending projects and the fact that Mumbai is an important city ,” said ManishAgarwal, leader, capitalprojects and Infrastructure, PwCIndia.
The Mumbai Trans Harbour link and the coastal road are two such projects that have been at the planning stage for more than a decade. Thecity’s share in individual company order books is larger for some. For Tata Projects, almost 50 percent of its ~40,000 cr ore order book is from Mumbai, including a package for the Mumbai Trans and the Bombay Development Directorate Ch awl redevelopment in W or li.
Even for an engineering conglomerate of the size of Larsen & Toubro, Mumbai contributes 9 per cent to a huge order book of ~2.84 trillion.
These include two packages for the Mumbai Trans harbour link and the Shivaji statue.
To put the share in perspective, the contribution of the rest of the world (excluding India) to L&T’s order book was at 20.9 per cent as of December 2018.
In addition to Mumbai, other Tier I and Tier II cities across India are upgrading their infrastructure with various metro projects.
For instance, for Simplex Infrastructure, 16.6 per cent of the company’s FY2019 (nine months) order book of ~16,805 crore was from metro projects across India.
However, it is unlikely that one city would contribute in a large way similar to Mumbai.
“Other cities in the country may need the same kind of infrastructure; it may not be easy to find the funding to execute projects of similar scale in a short span,” Agarwal said.