The Indian Road Sector – An Overview
13 th September 2011
Isolux Corsán is a leading Global Spanish Company
We work in the fields of Construction, Energy, Concessions,
Environment and Engineering Services across the globe. The
Company’s cornerstones are creating Transport Infrastructure,
Specialized Buildings, Conventional & Renewable Energy,
Telecommunication, Water & Sewerage, Oil & Gas .
The Company, with a portfolio of 26 Billion Euros and Turnover
of 3.5 Billion Euro, is actively present in 32 countries including
Brazil & India (out of BRIC). The company is ranked 56 in ENR’s
Top 225 International Contractors in 2010
Group has some illustrious companies as Tecna for Oil & Gas;
Emesa for Prefabricated Metal Structures , T Solar Global in
Photovoltaic Energy and Infinita Renovables for Biofuel Energy.
How we grown in India Region
(India Region– includes in our
expansion other countries in Asia)
In 2003, Isolux
in India for
In 2007, a
In February 2008
Isolux Corsán was
in India (291 Km) ,
and also set up an
for its Power
In 2009, Isolux
Corsán India opens
its Corporate Office
in Gurgaon and
added two more
projects to the
portfolio. The first
EPC project in HV
In 2011 Isolux
Corsán is executing
Concessions and 4
projects and a
Power Plant at
We are one of the
to have grown
really in diversified
infra business in
• NHAI believes that 7,000 km of project award in FY2011-12 is achievable (Vs 5,000 km in FY10-11).
While it has already awarded 1000 km of projects in FY2011-12, it has also received bids for
another 1,000 km.
• States following NHAI’s path. Up gradation of Highways trough BOT system in most of the States.
Project Award momentum to step up further
•Ground work ready: Feasibility reports and DPR ‘s completed for 6,000 km
•Fast tracking the process: Annual Technical Qualification and E-bidding underway.
•Qualification Criteria: based in the size of the company and the projects performed before.
•Transparency: only one economical figure is submitted (premium or grant)
• Very aggressive bidding
• Subdued capital markets and limited participation from private equity players is making difficult for
most players to raise fresh capital to fund their equity commitments.
• With larger and bigger ticket size of BOT contracts coming up for bidding and NHAI preferring the
toll model, bigger players will be greatest beneficiaries of expected awards.
• More than 40 bidders in small-medium size projects
• Technical qualification for successful bidders is uncertain in some cases
Limitations to overcome
• Innovation on design and value engineering is seen as a negative approach by NHAI
• Lack of coordination between Government Departments
• Land Acquisition (Acquisition law from 1894 in revision)
• Mapping of utilities in urban areas (at least) should be compulsory
• Railway coordination is still an unresolved mystery
• Forest and environmental clearances needs expedition
• Lack of good subcontractors. Project Management Vs deploying own machinery and human
Limitations result in time and cost overruns
• The Golden quadrilateral (GQ) contracts encounter higher number of legal issues . Out of the total
(128) contracts awarded nearly 66 % were under dispute.
• After an lengthy process, most of the claims end up in Arbitration Tribunal (taken up by the Higher
Court). Disputes between NHAI and the contractors have seen over Rs10,000 Cr-of the latter's
money getting stuck in legal wrangles, which has delayed project completion. Almost 90% of the
arbitration cases have been won by the contractors, but NHAI has not accepted them and
challenged them in court.
Leakage: a big issue
• Open Toll
• Improvement of alternative routes
• Low value of time
• Big gap between cost of toll and cost of manpower
• Performance indicators in road maintenance activities
• Operations based in extensive use of manpower
• Trade off between cost saving introducing technology and very cheap non qualified manpower
• Integral Operation and Maintenance subcontractors are showing up due to the lack of capabilities
of small-medium Indian developers
Control Corridor & Safety: the major concern
• High rates of accidents
• The CA provides a good standard in Control Corridor activities and Safety in the Highways: ATMS,
compulsory patrolling, ambulances, cranes...
• Lack of driving education
• Incredible diversity in the types of vehicles in the highways
Isolux Corsan Concessions India Pvt Ltd