'There has been a knee-jerk reaction to the flyover collapse'
— Parvez Umrigar, Managing Director, Gammon
Infrastructure Projects Ltd
The collapse of a section of a flyover in Hyderabad last
month, has not shaken Gammon Infrastructure Projects Ltd's resolve to build
elevated structures in future. The company is the contractor for the flyover
which is still under construction. Parvez Umrigar spoke to Poonam
Singh about his company's future plan. Excerpts:
A case has been registered against Gammon over the flyover
collapse in Hyderabad.
It was not a flyover collapse as was widely reported. The flyover is two km
long; what happened was that one span out of 30 spans of the flyover collapsed.
This span was temporarily under erection. We like to be prudent. We are waiting
for the committee (looking into the cause of the fall) to submit its report and
let the state government address the issue.
One of the reasons for the flyover to collapse was that the soil was loose since
the local authorities had carried out pipe installation close to the site before
the project was implemented. Whether it is the issue of soil or parallel works
or issue of design or structural defects needs to be investigated.
Without being proactive I would like to say that Gammon is not an overnight
company; elevated structures are Gammon's forte. It is not the first or last
structure that has fallen worldwide. One has to understand the reason behind the
mishap; to what extent it is attributable to professional negligence and if that
is the case then it has to be taken note of very seriously. There has been
knee-jerk reaction which was to be expected. All said and done, there was no
damage to life and property.
Is it true that subcontractors were involved which resulted in faulty
Both the state and Gammon have clarified time and again that no subcontractors
were involved. Even if a subcontractor was involved, the main contactor would
always stand as principal employer, responsible for everything. Subcontracting
is a part and parcel of any business, which Gammon does in various places. But
in Hyderabad the work was not given to a subcontractor.
What about project insurance?
ICICI Lombard is the company's major insurer for this project. We have filed
claims. The insurance will cover faulty construction in this case. We have
covered ourselves adequately on everything, including the design defects etc.
Which major projects is Gammon currently implementing?
We have a work order basket of nearly Rs 7,700 crore divided into 65 to 70
projects, mainly in power and transport. We are also looking at port and road
projects. We are implementing a large number of PPP projects.
The transportation projects on PPP basis include Gorakhpur bypass in Uttar
Pradesh (Rs 600 crore), a bridge on Kosi river (Rs 400 crore) and Mumbai-Nashik
expressway (Rs 600 crore). We are also developing the Mumbai container terminal
project on equal partnership with Spanish firm Dragdoss.
In power, we are implementing two hydropower projects of 70 mw each, costing
around Rs 400 crore each. Over the next two years we are planning to develop
biomass-based power projects worth Rs 1,000 crore in Punjab and Haryana. We have
a small auto ancillary SEZ which is with TISCO near Jamshedpur.
Besides, we have bids for various projects at Paradip Port in Orrisa and Mumbai
Trans Harbour Link. We are looking forward to bidding for airport projects, GQ
six laning projects by NHAI, biomass-based power projects, and mass rapid
What is your experience in implementing PPP-based projects?
We expect the model concession agreement (MCA) to improve over a period of time.
With this the life of projects should be also increased. NHAI has limited the
concession period to as low as 12 to 15 years in its MCA. It's a very low
lifeline for a project; it should not go below 20 years. If the concession
agreement is for 12 years and if the value of the project is high and by chance
the traffic fails to pick up, the private player will have very little time to
recover the investment.
PPP in power is good enough, as the sector requires a lot of investment. If
private players are willing, the government should encourage. The number of
players participating in each and every bid for power projects is increasing.
Competition in the power sector has also increased and now the government should
take measures to allow only capable players for the financial bids since PPP is
a costly affair. UMPP got six bids which were far more than you could expect in
What will be Gammon's thrust area in coming years?
Our thrust area will be where the government provides thrust. Indian
infrastructure is doing well; it is exciting days for us as far as business
goes. Power and transport will see more projects. We will be happy if we win at
least two concessions a year. We are going thorough a steep growth curve.
[01 October 2007]