Boston, MA -- (SBWIRE) -- 07/25/2012 -- BMI View: We remain convinced that the construction sector's fortunes will improve in FY2012/13 as monetary conditions are already becoming conducive for construction. As such, we are maintaining our real growth forecasts for the construction sector at 7.2% in FY2012/13. However, the lack of willingness to carry out regulatory reforms during the FY2012/13 budget announcement is concerning for the outlook of the 12th Five-Year Plan. Therefore, we have revised down our medium-term construction forecasts, with real growth for the sector averaging 7.8% (previously 8.1%) per annum between FY2013/14- FY2016/17.
Key drivers affecting growth include:
- In February 2012, India's Ministry of Shipping announced plans to carry out more than 22 new projects during 2012, reports PTI, citing a statement by shipping minister G K Vasan on February 20 2012. The projects will involve an investment of more than INR160bn (US$3.21bn), with five or six due to have been completed by end-March 2012. The ministry is also discussing Land Use Policy and Coastal Shipping, which is undergoing an interministerial consultation and is expected to be placed before the cabinet. Once the consultation is finished, the policy will be cleared, according to Vasan.
- In March 2012, the Indian government had launched an INR200bn (US$4bn) tender for 15 road infrastructure projects under a design, build, operate, finance and transfer (DBOFT) basis. 10 of the projects will involve the widening of roads to four-lane highways, whilst a further three will see roads widened to six-lane highways. They will encompass highways totaling approximately 2,000km. More than 60 companies are expected to bid for the projects and the National Highways Authority of India will announced the winning bidders during the fiscal year 2012/13.
- In April 2012, Chinese state-owned construction company Power Construction Corporation of China (PowerCorp) has been awarded a US$2.4bn contract to construct the second phase of a 3840MW coal-fired power plant in the state of Tamil Nadu. The contract was awarded by Indian infrastructure developer Infrastructure Leasing & Financial Services Limited (IL&FS) under an EPC - Engineering Procurement and Construction - framework. PowerCorp is expected to install four 660MW generators at the project site. The first phase of the power plant, 1200MW, is expected to be completed in June 2013. The contract win marks the first time for a number of years that a Chinese company is providing EPC services to a major power plant project in India.
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