We are presently executing several mega projects in the transportation infrastructure segment

D K Sen

Whole-time Director & Sr Executive Vice President (Development Projects), L&T

How do you view the mega infrastructure development plans of the government in creating a strong nation?

The government is of the opinion and rightly so, that capital expenditure creating assets act as an engine for economic growth. This is the underlying idea behind the targets laid out in the National Infrastructure Pipeline. India has long been hampered by a lack of adequate infrastructure, which has held back its economic potential. These new plans, if properly implemented, should help to address some of these issues and improve the overall competitiveness of the economy.

However, it is important to note that there are some potential risks associated with such a large-scale program. There is always the possibility of cost overruns or delays in project completion. Overall, though, I think these plans present an exciting opportunity for India to build on its recent economic progress and become a global powerhouse in the years ahead.

Based on the current spending trends by the governments, our order prospect pipeline for the remaining nine months of the current fiscal is around Rs 7.6 trillion comprising domestic prospects of Rs 6.1 trillion, out of which infrastructure segment alone is pegged at Rs 5.6 trillion. The total order prospects in infra are from the areas of Power Transmission and Distribution, Water, Transportation infrastructure, Heavy Civil, Buildings and Factories and Minerals and Metals for the fiscal. We expect the public Capex spends comprising the Centre, states, and Public Sector Units in the current year to be better than that of the previous year.

How do you assess the progress of infrastructure projects and developments in the country under the NIP programme? According to you, what are the major bottlenecks in project execution? 

There are various ways to assess the progress of infrastructure projects and developments in a country. One way is to look at the budget that has been allocated for these projects and how much of that has been spent. Another way is to look at how many projects have been completed and how many are still in progress. One of the major bottlenecks in project execution seems to be the lack of coordination between different government agencies. There are also delays in obtaining environmental clearance and getting land released for project construction.

But I think these plans present an exciting opportunity for India to build on its recent economic progress and become a global powerhouse in the years ahead.

Being a major player in EPC, manufacturing and services, how is L&T involved in the key government programmes of Bharatmala, Sagarmala, Jal Jeevan Mission, GatiShakti, Make in India etc?

L&T is involved in a big way in many projects of Jal Jeevan Mission. We are indeed fulfilling the 'Har gharnal se jal' vision of these projects. Many state governments have very enthusiastically launched many water-related projects and are progressing quite well. L&T, as an EPC contractor has undertaken many of these projects and I am confident that good water infrastructure will benefit millions of fellow Indians. L&T is a conglomerate which has always endeavoured to indigenize manufacturing. L&T has been Making in India for the world for a long time now. Be it large equipment for the oil & gas or the power industry, or industrial valves or equipment for the mining industry or the Special Variant Wheel Loaders for very harsh terrains for Border Roads Organization (BRO), or the Large Girder Transporter & Launching Equipment for High Speed Rail projects, L&T has been at the forefront of adapting technology in the Indian context. For many of our projects as well, we source or manufacture several items within the country.

As a leading road builder, our company has designed and constructed more than 13,500 lane km of highways including expressways. We also build bridges to meet the varied needs for transportation infrastructure in different areas across India for NHAI and MoRTH. However, L&T did not have much success in Roads & Highways tenders because of entry of small players due to massive dilution of qualification criteria, both technical and financial.

How is the transportation infrastructure transforming in the country? How is L&T contributing to the modernization of India's transportation sector?

We are presently executing several mega projects in this key infrastructure segment ranging from high-speed rail and dedicated freight corridors to metro rail systems, from river and sea bridges to RRTS railway system.

The two cities of Mumbai and Nagpur will soon be connected by a 6-lane, PQC access-controlled expressway, part of which is built by L&T. We are also executing parts of Mumbai Coastal Road Project to seamlessly connect south and north Mumbai. Our Heavy Civil Infrastructure Business is building Packages 01 and 03 of the 21.1 km Mumbai Trans Harbour Link that will connect Mumbai to Navi Mumbai and the Nhava Sheva Port.

Our Heavy Civil Infrastructure business is building India's longest river bridge connecting Dhubri in Assam to Phulbari in Meghalaya over the river Brahmaputra that will reduce the distance between the two states by 250 km and improve the connectivity of the North Eastern States with the rest of the country.

Our Heavy Civil Infrastructure (HCI) and Transportation Infrastructure (TI) are executing certain sections of India's first High-Speed Rail Corridor, the Mumbai-Ahmedabad High-Speed Rail (MAHSR).

We have already built several sections of Delhi, Mumbai, Lucknow, Chennai and Hyderabad metros in the country. Hyderabad Metro is also operated by us. We are also executing the Delhi-Meerut RRTS system (82.15 km), a vital line jointly funded by ADB and AIIB.  L&T is executing significant scope of JICA funded Western Dedicated Freight Corridor across all domains of Civil & Track, Electrification, Signalling and Telecom on a Design Build basis. We are also executing major World Bank funded sections in Eastern Dedicated Freight Corridor across all railway domains.

What kind of revenue growth is you expecting in the coming years from infra projects?

L&T is expecting a strong revenue growth from infra projects in the coming years. This growth is expected to come from the government's focus on infrastructure development, L&T's strong execution track record and its diversified portfolio.

We expect to grow between 12-15% on the orders in FY23 and we won about Rs 1.9 trillion worth of orders in the previous year FY22. And we were hoping between 12-15% revenue growth, given the performance of the company so far in quarter one.

What are your future plans and which segments will be on focus in your activities?

We, at L&T, are committed to face the global climate change crisis and shape the future around frontier technologies to mitigate the ill effects of climate change. We do believe that alternative fuels such as green hydrogen will go a long way to create a cleaner environment and contribute towards the nation's energy security. L&T has already commissioned an indigenously built captive green hydrogen plant at our Hazira complex and incidentally, L&T is only Indian company in the ENR list of top 200 environmental firms, securing 3rd position. We have a unique opportunity to play a significant role to accelerate the ecosystem around green hydrogen, with our thrust in both the EPC and BOO spaces, coupled with the backward integration of manufacturing electrolysers and grid battery energy storage systems. On the digital front, there is maturity in understanding data security, data ownership and the government is also continuing its thrust for data localisation. Thus, the new Data Center and Cloud Services businesses are distinctly positioned to achieve scale in the future. Another dimension to the digital world is e-commerce and the boom of services being delivered through the internet. In these spaces, we intend to capitalise on our engineering DNA to design superior services. We have made moves in the e-commerce space through SuFin, our B2B platform for the trade of industrial products and services, where we put power in the hands of SMEs and MSMEs and our EduTech platform, through which we empower students  seeking practical and application-oriented engineering courses.

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