ÆßÃõ¼º½

The Pradhan Mantri Gram Sadak Yojana (PMGSY), Bharat Mala and other ambitious plans for accelerating the rate of road building in India, backed by adequate fund allocations, explicitly indicate that the roads and highways sector is one of the first few sectors to witness an upward trend.

Significant initiatives and programmes from the government have helped in the revival of the sector. The thrust on this sector could also be seen in the Union Budget as well - Rs 97,000 crore has been earmarked for roads, out of which Rs 19,000 crore is specifically for rural roads.

In all these developments, road building equipment will play a major role, and suppliers and vendors are in a euphoric mood.

But there are a few voices of apprehension. Anand Sundaresan, President, iCEMA, has voiced his concerns, in many forums like the Make in India Week and the recently concluded Bauma expo in Germany, regarding the size of road building and other construction equipment which will be required to cater to the implementation of extensive road development plans for the North-Eastern states and rural sectors. He has specifically mentioned that the current equipment sizes currently offered by the Indian vendors are not suitable for these far flung, sub-Himalayan regions. Simply put, the roads are smaller in these areas, and access is difficult, thereby rendering large-sized equipment unsuitable.

Most road equipment vendors in India have a global footprint. They are now drawing from their stable of international product ranges, to meet the immediate or interim requirements, followed by plans to manufacture smaller-sized equipment from their India-based facilities.

Prospects: NE and rural regions
Most road equipment suppliers are aware and recognise the need for supplying compact equipment to meet the operational requirements generated from North-Eastern states and rural regions. Talking about the rural sector, it is important to note that rural areas in the plains are easy to access and have already witnessed modern roads in most states. However, the developments in the hills and sub-Himalayan regions have been inadequate and the government is pushing road developments in these far-flung and inaccessible locations. For example, Nagaland has received the lion?s share of $1.5 billion for roads according to a report by Feedback Consultants. Ramesh Palagiri, Managing Director & CEO, Wirtgen India Pvt Ltd says, ?We see great opportunities in the roads and the highways segments in the coming years in India. The government has clear focus on roads, and enough budgetary allocation has been done for road projects, including the North-East and rural areas. We expect the contribution from the North-East to be around 10 per cent from the machinery point of view, and for rural roads, another 10 per cent.?

Hiten Kapadia, Business Line Manager, Atlas Copco (India) Ltd, shares his views, ?India has a great potential to grow. Especially when lots of work needs to be done in infrastructure, mining and other segments, the scenario is now expected to take a positive turn in the coming years.? He adds, ?Road construction equipment from Atlas Copco has successfully featured in prestigious projects in the North and North-East. The Dynapac CA255 soil compactor and CC385HF tandem rollers have been the popular choice.?

Jasmeet Singh, Head - Corporate Communications, JCB India Ltd, confirms, ?North-Eastern states and rural roads will be the primary drivers of growth in this sector. According to a recent report, ?Rebooting Indian Infrastructure? published by Feedback Consulting, in 2015, the government has already announced $2.3 billion for road construction in the North-East, of which $1.5 billion was set aside for Nagaland exclusively.?

Blesson Varghese, Managing Director, Marini India Pvt Ltd, is cautious in his assessment. He says, ?It should be noted that while increasing the road construction rate, road quality should not be sacrificed. Materials used, construction methods and competency of the contractors executing the jobs should be carefully monitored and evaluated as a result of this increased production.? However, he adds, ?The connectivity of rural areas by the provision of all-weather access roads will greatly improve the agricultural trade (markets) and also the social aspect (education, healthcare, services) of the rural population. This in turn will ultimately benefit the country as a whole.?

Dimitrov Krishnan, Vice President and Head, Volvo CE India, also confirms, ?There are huge opportunities in the road building sector at present. Projects in the North-Eastern states make up a substantial portion of the overall work. But we should also remember that there are road projects across the length and breadth of the country, and at present it?s the sector that?s driving the construction equipment business in India.?

?A lot of infrastructure and road projects with a thrust given on the development of road network in the North-East and rural areas announced by the government is quite a big and promising opportunity for OEMs,? pips in AK Haldar, Executive Director Marketing (Mining & Construction), BEML, a Government of India enterprise and manufacturer of a large range of road equipment.

Hemant Mathur, General Manager and Head - Construction Equipment Business of L&T explains the potential in detail, ?The spending on roads and bridges infrastructure creation in India is projected to grow at a Compound Annual Growth Rate (CAGR) of about 18 per cent over the next five years. The Plan outlay for 2016-17 stepped up the budgetary support for road transport and highways to Rs 97, 000 crore. The road sector provides an opportunity of Rs 10 billion per annum for equipment and this is likely to grow further at a CAGR of 18 per cent for the next five years.?

Mathur further elaborates, ?At present, National Highways with an aggregate length of 8,480 km are serving the North Eastern region. These National Highways are being developed and maintained by the Ministry on an Agency basis. A specific programme has also been initiated by the Central government for the accelerated development of roads in the region covering about 10,140 km length of National Highways, State roads and GS roads under the ?Special Accelerated Road Development Programme in North-East? (SARDP-NE) including Arunachal Package. The development of the balance works under East-West corridor and NHDP-Phase-III shall have to be completed in the 12th Plan. Leaving apart the above, development of balance length of about 1,766 km length of NHs may be taken up under NH(O) scheme of the Ministry of Road Transport and Highways as per availability of funds and inter-se priority. Ten crucial greenfield highway projects of 1000 km worth Rs 15,000 crore have been backed by JICA at 0.5 per cent interest for tenure of 25 years.?

Compact equipment on offer
Kapadia details his company?s offerings, ?Specifically in the North-East, Dynapac soil compactors, tandem rollers, pneumatic tyred rollers and pavers have been deployed in six different extremely remote sites where temperatures range from 2 to 10oC. With rough roads or no roads, reaching these sites is a challenge by itself.? He further elaborates, ?Especially for the rural and North-Eastern states, in terms of lowest operating cost for the customers, our Dynapac CA255 soil compactor has the most advanced compaction technique to achieve the end-result in minimum passes. The recently launched Dynapac CC425 tandem roller offers lower fuel consumption and compaction is achieved with higher frequency which provides higher productivity as compared to the same class of machines available in the Indian market. This compaction efficiency ensures a perfect surface finish, rework is minimised which in turn lowers the cost of operation. A new local addition to the portfolio is the Dynapac CC125 baby roller. This roller offers the best operator dashboard and has the highest gradability of 38 per cent in its class. With excellent visibility and good operator comfort, this new roller has low operating cost with low fuel consumption and low maintenance cost in this class.?

Palagiri informs, ?There has been an increase in allocation for the roads in the North-East and the rural areas, so we need to offer the right kind of machinery for use on these roads, which would be different from our standard machines what we offer for national and state highways. And we at Wirtgen are working on the same. We are planning to come out with smaller asphalt pavers which could be used in rural and also North-Eastern roads.?

?Our EC140B Prime, which is a 14-tonne machine powered by a 73 kW engine, is our smallest crawler excavator and a popular unit with customers in North-Eastern states. Having said that, there will be a lot of hill-cutting work required to build many of the highway projects for the North-East, so we still anticipate demand for larger machines in this part of the country. Some smaller, rural roads will require compact equipment, but regular size equipment will be used for most projects,? explains Krishnan.

Mathur informs, ?At L&T, we are continuously innovating on both introducing the best-in-class products and expanding our range of products to meet the customer requirements. We are moving towards providing comprehensive solutions to the customer needs both on products and service support.

He adds, ?We are already offering machinery of various capacities ranging from hydraulic excavators, wheel loaders, motor graders, dozers, soil compactors, tandem compactors and mini-compactors. We also offer versatile attachments for hydraulic excavators like rock breakers, bucket crushers, pulverisers, cutters and several demolition tools. Our products are versatile with the option of variants to suit different applications .The customer can select the right size/variant based on his need which can range from rural roads to National Highways in different applications.? Mathur gives further details on his company?s product range: ?We operate in the premium equipment space with offerings which are the best in class. Our products have the latest technologies ideally adapted for the Indian customers. Our products are equipped with features like KOMTRAX, VHMS and remote monitoring tools which help in improving their operational efficiency and availability. The customer can also select a host of product support offerings ranging from Full Maintenance Contracts to Site Support Arrangements to ensure superior equipment health.?

Is Equipment Bank an answer?
It is evident that the ticket size of many road projects in the merging segment will be small to medium when compared to the mega NHAI, state highways and urban development sectors. In turn, smaller contractors are bound to find high business traction. However, they will encounter the challenges of funds and ready availability of suitable equipment, in their respective areas of work. Having recognised these challenges, forums like iCEMA have proposed formation of equipment banks which can be utilised by small and medium contractors to complete the construction in line with the accelerated completion targets proposed by the government. Industry reactions are mixed, but overall, there is a consensus.

Kapadia emphatically says, ?Yes, the formation of an equipment bank will be very effective in the road sector. Although there is a spurt in road equipment demand, contractors would prefer to wait till this becomes sustainable and then invest in a large equipment fleet.?

Varghese also agrees, albeit cautiously, ?This is a good imitative as it maximises the utilisation of existing idle equipment which would otherwise be just parked in the yard and not doing work. The IronTread online platform is a good start. However, getting the equipment to a centralised area for the rural regions might prove a big logistics challenge.?

?It is a good move as this will help the availability of equipment for deployment on continuous basis,? says Haldar.

Mathur is a bit cynical, ?There are equipment banks operating in the market for the last so many years. However, these are mostly in the unorganised sector operated by individuals who specialise in the hiring and leasing of specific equipment rather than a complete range of equipment. We are yet to see an organised market which leases all equipment for a specific application, say roads or mining, etc.?

Krishnan explains his long-term viewpoint: ?The idea of an equipment bank is not necessarily relevant only to the North-Eastern states. The principle of creating a pool of the latest equipment and giving users the opportunity to use it when they need it is essentially the beginning of a rental industry. Creating this type of business function is indicative of a maturing economy and it?s something we expect to see grow in the coming years as India?s economic development picks up pace.?

Palagiri explains his different standpoint on the subject: ?According to me, what will help the manufacturers and the contractors would be facilitating easy leasing norms, which should enable more use of equipment and also does not pose a capex burden on the contractors.?

Industry opinion: Fast tracking road construction
Palagiri reflects, ?We feel the government is on the right track with regard to accelerating the road building activity in India, and they have already reached a respectable figure of 18 km per day with close to 10,000 km of new roads which will be awarded in this financial year. Along with this, awards are also expected from the state highways.? He is bullish on the prospects, ?We feel it is possible to reach 30 km per day and if this trend continuous, then 40 km per day is also achievable in the coming years. As I have said earlier, what is also required to be done is to have stringent prequalification norms for awarding of contracts which would ensure that the companies which are awarded the jobs deliver in terms of quality and product, within the targeted time. As far as equipment usage is concerned, we feel it is moving in the right direction.?

Kapadia talks about use of alternative equipment, ?Cold milling is a very important segment, considering the need to contribute in a positive way to the environment footprint. The planers will play a vital role in the upkeep of the roads, at the same time, helping to reclaim material for reuse. Dynapac planers are designed to deliver maximum productivity in varying job sites and operating conditions. What is required is more awareness and a push from the government for reusing bitumen material for a better impact on the environment and low cost of operations. Dynapac pavers from Atlas Copco have a shock absorber system and the thinnest gearbox which are best in class. The Dynapac SD generation of pavers, such as the SD 2550 are geared to make wider roads with a 14 m working width, a more powerful engine and higher capacity of laying. Further, the Dynapac range of pavers offers an advanced big hopper with the widest conveyor tunnel in the market which reduces the material segregation and helps build better quality roads.?

Singh quotes from a report by Feedback Consultants, ?Significant changes have been made in the approach to facilitate funding and growth. A hybrid model on 40:60 basis is slated to provide further impetus to the sector. In addition, 100 per cent equity disinvestment has been permitted for private developers post two years of completion of BOT projects. The right steps have been taken by the government to facilitate growth in the sector.? He emphasises on the urgent need to plan ahead, ?Now the key is to ensure active implementation of these projects. Announcement of the Hybrid and Toll-Operate-Transfer model, equity disinvestment, easy regulatory clearances and setting up of state-led road development corporations will immensely help in achieving the set target. While some issues like NPAs and an ineffective dispute resolution mechanism still remain, we are certain that these complex infrastructural challenges will come to be addressed. We have seen remarkable growth in this sector in the last couple of years. Around 600 highway projects involving construction of around 13,000 km have been awarded. Moreover, nearly 50,000 km of state highways are being upgraded to national highways.?

Krishnan explains his viewpoint, ?Any issues related to the process of awarding contracts are for the Government of India to comment on. From an equipment standpoint, increasing the daily target from 30 km to 40 km is relatively simple in terms of resources - it just needs more manpower and machines. There will be some capacity issues too, related to the supply of building materials from the batching plants, but we can already see the results of the road building initiative reflected in demand. For the first quarter of this year, demand for our equipment in road building projects was up 60 per cent on the same period of 2015. And our sales of equipment into road building were their highest for eight years for the period January to April of this year. We expect demand to moderate somewhat over the course of 2016, but overall we?re expecting sales into road building companies to be up 30-40 per cent on last year.?

Varghese emphasises the use of technology like an intelligent compaction system like Bomag?s VarioControl for soil applications and Asphalt Manager 2 for asphalt applications together with Bomag Compaction Measurement System (BCM05) for both measurement and documentation. He adds, ?Flexibility and functionality are what you would look for when selecting compaction equipment for work in rural development. Our combination tandem rollers fit the bill with easy transportation and effective compaction and sealing of the asphalt surface due to the rear rubber tyres. Coupled with Bomag?s Economizer, operators will have a visual indication when compaction is reached and therefore no unnecessary passes are required and there?s no damage to the pavement due to aggregate crushing. This contributes to a more efficient operation.?

?The government?s aspirations are good, which (in turn) depend on how fast various clearances are given and contracts are awarded, with funding agreement,? explains Haldar on his view on the dependency aspect.

Future Outlook
?By 2020, the future for overall equipment is expected to grow at 11.8 per cent to reach the 82,750 volume. The growth rate for earthmoving equipment is expected to increase by 12.5 per cent, and for the road sector by 12.8 per cent,? says Palagiri.

Singh opines, ?In absolute numbers, the overall equipment industry is expected to grow at 10 per cent by volume and can reach an approximate number of 83,000 units. Soil and asphalt rollers will continue to grow owing to the growth in the segment. However, roads and highways is a sector that will work as a pull factor for the entire CE industry.?

Krishnan says, ?By 2020, we expect the machine population for construction equipment in India to be between 70,000 and 100,000 units. We would like to see it close to the 100,000 mark, as it will mean that India has pursued its goal for infrastructure development with appropriate investment. To this end, the most important factor in determining the state of the road building sector by 2020 will be the Government of India and its success in executing its expansion and upgrade programme.?

He elaborates, ?Also, we should remember that 2019 is an election year, which will undoubtedly impact activity levels for all areas of construction. In terms of types of equipment, we expect to see some growth in smaller or compact units as labour becomes more expensive. Projects such as the development of Smart Cities will require smaller units and this will help drive demand. We also expect growth in the larger class of machines as demand from mining continues to grow to help meet rising energy needs.?

Kapadia says, ?With the Modi government?s 100 Smart Cities plan in place, there is expected to be a big boost in infrastructure projects like Metro rail, BRTS, high-speed Internet, new flyovers, hospitals, Foot-on-Board bridges, etc. On a broader aspect, there will be speeding up of NHAI project rollouts, which along with the boost in the state and rural road projects, will help companies like Atlas Copco tap new business opportunities.?

However, Mathur cautions the industry by saying, ?The market is also rapidly spreading and existing tough competition has an efficacy in lowering operating margin, which is a major concern to sustainability in the market.?

We foresee a new bright future for all contractors in India. Whether small, medium or large scale, all contractors will be active in India. We do believe there will be a realisation of the huge untapped potential in all product segments of the road equipment in the country. Besides compactors, pavers and tandem rollers, equipment such as planers, feeders, etc., will also get an opportunity to deliver higher quality roads in India.

Compact Equipment Recommendations

• Excavation:

10 to 15 tonne class hydraulic excavator
Backhoe loader

• Earth Movers: 

3 to 5 tonne payload capacity wheel loaders

• Haulage: 

9 to 25 tonne payload capacity dump trucks
4 m3 capacity transit mixer

• Levelling & Grading: 

Up to 160 HP powered, 12-feet mouldboard size motor graders
Up to 100 HP power-tracked dozer.
Skid steers

• Soil Compaction: 

Up to 6 tonne operating weight and dynamic compaction force of 50 KN

• Aggregate Production:

Mobile three-stage 100 to 150 TPH crushing & screening plant

• Concrete Batching:

18 - 30 m3 per hour compact with in-line bins concrete batching plant

• Asphalt Batching: 

80 to 100 TPH compact asphalt batching plant

• Paving: 

Sensor paver with 6 m screed width, for asphalt or concrete

• Top Layer Finishing: 

6 tonne operating weight with up to 10 tonne dynamic compaction force Tandem roller
8 tonne class PTR for asphalt
6 m width curing and texturing machine for concrete

• Cranes for Lift and Shift

Compact taxi crane with high lifting capacity and long boom length
Safe hydra crane
Telehandler
Truck mounted articulated boom crane

• Auxiliary equipment 

Portable diesel power
Portable compressors
Mobile maintenance workshop
Containerised housing and offices
Other tools and tackles

Operational challenges in the NE and hill states

• Small-time window of maximum six months, since the area is covered by rainforests
• Low winter temperature and snow in hilly areas
• Frequent landslides and flash floods causing unscheduled stoppages
• Non-availability of suitable aggregate in many locations
• Inadequate space for plant set-ups
• Use of dry river bed material unavoidable
• Scarcity of sand and fines
• Thick forests
• Transportation logistics a nightmare
• Low load-bearing bridges and culverts
• Winding roads
• Steep gradients
• Low skill availability
• Paucity of timely aftermarket support
• Areas are politically volatile
• Local interference hinders smooth construction
• Lack of funding for small and medium contractors.

Three CSFs for success in roads for OEMs

• More production: We have increased production by 50 per cent for the Indian market at our state-of-the-art factory at Nashik, Maharashtra, in the last one year and have more aggressive plans in the coming years.
• Advanced technology: Dynapac already has many proven road construction equipment for other countries which can be introduced in India now. Looking at the production demand and the pace, such products will be useful.
• Service set-up: More products, better service set-up and expertise are needed. We are investing in developing more resources directly and indirectly through continuous training and development for the team.

- Hiten Kapadia, Business Line Manager, Atlas Copco (India) Ltd

Breining Slurry Paver SP 8000 P for preventive road maintenance
The road transport network of any country plays a vital role in its economy, and the physical condition of its infrastructure is critical. Without adequate and timely maintenance, highways and rural roads alike inexorably deteriorate, leading to higher vehicle operating costs, increased numbers of accidents, and reduced reliability of transport services. When repair work can no longer be delayed, it will often involve extensive rehabilitation, and even reconstruction, costing many times more than simpler maintenance treatment which might have been carried out earlier. The need to protect the existing network and keep it in good condition is paramount.

Today, road asset managers expect solutions that are both economic and environmentally friendly for the maintenance of the network. Slurries micro surfacing perfectly combines both criteria because they are applied in a thin coat, therefore using little material, and are laid at surrounding temperatures, and are therefore low energy consumers.

Breining, the world leader in the manufacture of slurry micro surfacing machines from the maintenance department of the FAYAT Group, is a complete and innovating line of application machines - Slurry Pavers. This machine can be mounted on local trucks and semi-trailers as per the capacity.

In India, the company has more than 12 slurry pavers, repairing and maintaining roads on various national highways, state roads, and cities. Customers include names like Hindustan Coals Ltd, Elsamex India and Oriental Structural Engineers Ltd, among others.

Advantages of Micro-Surfacing:

• Micro-surfacing extends the life span of a road by five years and more.
• Traffic can be re-opened on a road between 30 to 60 minutes after laying.
• Improved skid resistant surface, thereby resulting in fewer accidents.
• Reduces water infiltration making the road surface impermeable.
• Fast application process results in minimal hindrances to road users.
• Cost-effective compared to traditional hot-mix asphalt laying (asphalt plant, paver, dumpers, power, labour etc., not required).
• The concept of micro-surfacing has been well adopted by the Indian government.

- Blesson Varghese, Managing Director, Marini India Pvt Ltd