Project Contracts

During the first nine months of the fiscal 2023-24 a total of 6,818 contracts amounting to Rs 7,82,105 crore were awarded in India. These contracts, spanning both domestic and overseas projects, were successfully secured by 4,153 companies operating across diverse sectors. These contracts also include 57 overseas contracts bagged by Indian companies for undertaking job work abroad. These are the broad findings of trends in project contracting identified by Projects Today.

Sectoral Analysis

During the first three-quarters of FY24 (Q1-Q3/FY24), the Infrastructure sector, comprising the Social and Transport sectors, accounted for a substantial share of 67.50 percent of the total contracts awarded. In all, 5,849 contracts with a collective value of Rs 5,27,922 crore were awarded. This included 132 mega contracts, each exceeding Rs 1,000 crore, worth Rs 4,68,616 crore.

Within the Infrastructure sub-sectors like Roadways, Power Distribution, Railways, Coal, Water & Sewerage Pipeline and distribution sectors saw the finalising of contracts worth Rs 4,98,517 crore and accounted for a lion’s share of 63.74 percent of the total contracts awarded.

Though capex expenditure from the Central government agencies came down sharply in the first three quarters due to financial constraints, the awarding of bids for road building already floated continued at a brisk pace in the first three quarters. In all, 2,513 contracts amounting to Rs 1,25,103 crore were finalised. Among the road-building agencies, the National Highways Authority of India (NHAI) finalised 261 contracts worth Rs 33,296 crore. Among the other developers, the Mumbai Metropolitan Region Development Authority (MMRDA) awarded 36 contracts worth Rs 23,527 crore. To ensure faster execution of already announced projects in the Railways sector, Indian Railways and other agencies awarded 219 project contracts worth Rs 98,961 crore.

To meet the increased demand for carrying the electricity generated by the fresh capacity additions in the power sector and to modernise the metering system, 457 contracts worth Rs 1,15,021 crore were awarded in the Power Transmission and Distribution sector. Among the key players, Maharashtra State Electricity Distribution Company (MSEDCL) played a prominent role by awarding 17 mega contracts totalling Rs 28,568 crore.

The Water Supply and Sewerage sector where state government agencies play a pivotal role, saw the finalisation of 974 contracts worth Rs 73,715 crore. But for the state elections in the four large states, Rajasthan, Chhattisgarh, Madhya Pradesh, and Telangana, the total figure would have been higher.

In the Real Estate sector, 290 project contracts with a combined value of Rs 16,662 crore were bagged by different developers. NBCC (India) secured a Rs 2,000 crore contract from the Kerala State Housing Board for the development of a 17.9-acre land at Marine Drive in Kochi, Kerala. Another contract worth Rs 1,269 crore was secured by Larsen & Toubro from the Public Works Department, Maharashtra for the reconstruction of Manora Amdar Niwas for the Maharashtra legislature at Nariman Point, Mumbai.

In the Hospital sector, 197 project contracts were awarded with an aggregate value of Rs 11,258 crore. Ahluwalia Contracts (India) secured the largest contract worth Rs 617 crore from Max Healthcare Institute to construct a super specialty hospital in Gurugram, Haryana.

Project orders in the Mining sector accounted for 15.42 percent of the total contract value finalized in the April-December 2023 period. In all, 102 contracts worth Rs 1,20,601 crore were finalized in this sector. Bulk of the contract value was finalized in the Coal sector, where a total of 76 project contracts worth Rs 85,718 crore were awarded. The most notable contract of Rs 30,438 crore was bagged by Power Mech Projects, in consortium with P.C. Patel Infra for the development of the Tasra Opencast Project situated in the Jharia Coal fields of Dhanbad.

In the Petroleum, Oil and Gas sector, a major contract was bagged by Engineers India from ONGC for the replacement of three CSU off-gas compressors and six regeneration gas compressors, along with the installation of the CBD vessel at Uran Plant under EPC Reimbursable basis. In all, 20 contracts worth Rs 34,135 crore were finalised in the first three-quarters of this fiscal.

In the Manufacturing sector, the Transport Vehicles and Equipment sector cornered most of the fresh contracts awarded during Q1-Q3/FY24. In all, the sector saw the finalisation of 252 project contracts worth Rs 54,522 crore. Within this sector, a mega contract valued at Rs 12,226 crore was finalised in the Railway Wagon & Equipment sector. Ramkrishna Forgings, in collaboration with Titagarh Wagons, secured this for manufacturing and supply of forged wheels to Indian Railways.

In the Aircraft sector, two mega contracts were finalised. Bharat Electronics secured a Rs 3,914 crore contract from Bharat Dynamics for the production of two regiments of the improved Akash Weapon System (AWS). Bharat Heavy Electricals bagged a defence contract worth Rs 3,700 crore to supply strategic equipment for the defense sector.

The bulk of the project contracts finalised in the Electricity sector was by the developers of Coal based power projects, Solar based power projects, and Hydel based power projects. In all, the sector saw the finalisation of 216 contracts worth Rs 52,027 crore. Bharat Heavy Electricals (BHEL) bagged a Rs 14,053 crore contract from NTPC to establish a  2×800 MW Supercritical Thermal Power Project Stage-II at Lara in Chhattisgarh.

In the Solar-based Power sector, SJVN Green Energy (SGEL) secured a contract worth Rs 7,000 crore from Punjab State Power Corporation (PSPCL) for the procurement of 1,200 MW Solar Power. SGEL will develop 1,000 MW project anywhere in the country and balance 200 MW in the state of Punjab as per the RFS provisions on Build Own and Operate (BOO) basis.

In the Hydel-based Power G R Infraprojects, in joint venture with Patel Engineering, secured a contract worth Rs 3,637 crore from NHPC for the construction of civil works for head race tunnel including intake, pressure shafts, penstocks, power house & transformer cavern, tail race tunnel, pothead yard, adits for Dibang Multipurpose Project in Arunachal Pradesh on EPC basis.

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