Chief Executive Officer, L&T Infrastructure Development Projects
1) What has been the PPP experience in urban infrastructure (successes, failures, learnings)?
L&T IDPL has developed marquee urban infrastructure PPP projects for over two decades. These include Bengaluru Airport, Hyderabad Metro, Vizag Water Supply project, Katupalli Port & Shipyard (near Chennai), Dhamra Port (near Cuttack), Coimbatore Bypass, and many office, commercial & residential projects in leading cities, such as Chandigarh’s landmark Elante Mall. All our projects in urban infrastructure have been state of the art in their respective fields at the time of its development and launch.
While every project developed by us is iconic and unique, all projects went through development risks, including delays in land availability, environmental clearances, midway change in scope, users fee issues, regulatory uncertainty, co-ordination with Union and State Government authorities for permits and approvals etc. With our experience in mitigation and management of risks in developing projects, the three critical success factors would be (a) Government Support, (b) Availability of Land (c) Project Structuring and Bankability.
L&T IDPL looks forward to developing new age urban infrastructure projects, especially environmental friendly initiatives in urban infrastructure. Unlike earlier construction PPPs, there are large emerging opportunities in monetization of urban infrastructure assets on PPP, similar to the successful experience of TOT (Toll-Operate-Transfer) NHAI Highways that raised USD 1.5 bn of Foreign Direct Investment (FDI). Such PPP contracts for Operations and Maintenance of existing urban infrastructure assets would increase operational efficiency & citizen satisfaction, and attract large FDI in Urban Infrastructure sectors. How about monetising Delhi Metro System assets on PPP, with private sector operation, and redeploying the monetisation proceeds for fresh construction of public tranport in the city? There are numerous such examples.
2) What will be the impact of the new technologies like Block Chain, Artificial Intelligence, and Internet of Things in matching the pace of infrastructure supply to the forever increasing demand?
Larsen & Toubro as a Group is committed to digitalisation. As CEO & MD of L&T, Mr S N Subrahmanyan says, “The objective of digital transformation at L&T Construction is to utilize the power to new and emerging technology to make very significant improvement to our business. We are committing significant investments of money and talent to this digital effort and the savings we expect to generate will be substantial, multiple times of investments that we make.” L&T construction sites, machines and equipments are fully IoT equipped and networked with sensors and receptors, for monitoring construction progress and cost control. AI is used to improve efficiency and utilisation levels for all projects.
L&T IDPL is leveraging AI, IoT and Blockchain wherever possible. Through sustained effort for ‘Less-Cash India’ Electronic Toll Collection (ETC) through RFID Tags or FASTags for NHAI highways has doubled over the last one year, and is currently at about 25% of overall collections. This would go up to above 50% in the next five years. Over 4,00,000 vehicles pass through L&T IDPL’s 38 toll plazas across 8 Indian states. We are into Big Data analytics to study seasonal variations, user preferences and behaviour, and consequent impact on the toll revenue. The Company is presently evaluating block chain technologies for seamless procurement. Going digital is the key to our growth and development.
3) What are your views on “The Economic Times Infra Focus Summit” and how important do you to feel is the need of organizing such summits?
Having attended earlier editions of “The Economic Times Infra Focus Summit” I am quite appreciative of your efforts. India is going to become the 3rd largest economy in the world by 2030 (see my pinned tweet @shypk). As early as in the next 12 years, India shall overtake France, UK, Germany and Japan, with only USA and China ahead of us. This economic growth will necessarily require much more infrastructure, and in turn will lead to even more urban infrastructure. With PPPs for operational urban infrastructure assets, much more is possible for India’s 53 million-plus cities and other urban areas. Being the largest Indian financial newspaper, Economic Times deserves our compliments on putting together this 6th Infra Focus Summit.