Upcoming projects with the Delhi Mumbai Industrial Corridor
By Kealan Finnegan
At a recent UKIBC/UKTI webinar on opportunities offered by the Delhi Mumbai Industrial Corridor (DMIC), UKTI’s specialist team in India set out the predicted value of winnable business available to the UK’s infrastructure sector at circa £87 million in the next two years.
Following a three-month scoping study, UKTI produced a report on the “Opportunities for UK Industry in the Delhi-Mumbai Industrial Corridor”. By using an analysis of UK competiveness and combining this with the overall budgets available, sectors were prioritised in terms of the opportunity available to UK companies to bid and win work.
The report sets out the key opportunity areas in real estate, water and environment, transport (MRT & BRT), airports, waste management and power. Further, it highlights the projects expected to be bid in 2014-15, including the Narmada Kshipra Water Supply Project, the Vikram Udyogpuri, Ujjain; Shendra-Bidkin Mega Industrial Park; Shendra ECC, Boraki Railway Station and Integrated Industrial City, Greater Noida. The report also identifies 22 projects for which budgets have been finalized and timeframes declared, totaling £6.23 billion.
Trunk infrastructure projects are being bid and implemented now, hence the amount addressable by UK companies is relatively small. Nevertheless, close to £33 million is estimated to be in the areas of design, architecture, project management and consulting. The UK is deemed to be well placed to win such contracts – consultancies working on DMIC already include Arup, Mott MacDonald, URS Scott Wilson and Halcrow.
Vivek Nanda, from AECOM, recently set out a broad overview of AECOM’s role with the DMIC Development Corporation. AECOM has the five-year Programme Management Contract for the Dholera Special Investment Region where the project scope consists of implementing all base infrastructure (water supply, sewerage, roads, highways, power and rail); performing flood-control and drainage measures to protect the future city; and overseeing all public-private partnership projects, such as the rail connecting Ahmedabad to Dholera.
During the question and answer session at the webinar on 30th April, the tender process was discussed and the “neutral” international competitive bidding process was noted, despite the large amount of Japanese funding in the form of grants and untied loans. DMIC bids happen in two stages: pre-qualification followed by RF. However, the procurement process is quick (usually 6/8 weeks) which underlines the importance of being prepared and ready to move quickly. A local presence on the ground is key in order to compete given the focus on L1 (lowest cost).
In terms of progress on DMIC, the top three performing States are Gujarat, Maharashtra and Madhya Pradesh, with Rajasthan, Haryana and Uttar Pradesh being slower. However, tenders are expected to see a sharp increase in view of India’s new government composition.
The challenges facing the infrastructure sector generally around land acquisition, delays getting regulatory approvals and financing constraints are well known as well as the large variations across States.
Indian business groups are, according to recent press reports, considering increasing investment in the sector either directly in power and port projects or through debt funds. Indeed at UKIBC a recent increase in enquiries from India companies looking for technical collaborations with UK’s infrastructure development industry has been noted.
It is expected that the new government will be determined to speed up the regulatory approval processes and attract the private sector investment needed to achieve the $ 1 trillion infrastructure investment planned.
For a copy of UKTI’s report on DMIC or further information please contact Caroline Erskine at: caroline.erskine@ukibc.com
References
AECOM
Business groups hike infrastructure investments
