Metros, smart cities, power, clean water — that is the vision for a better India, and that’s the business value that Tata Projects is delivering across the nation.
Although ‘Make in India’ continues to grab headlines, there’s another equally engaging India-centric story that’s being played out across the nation’s states — the make-India-better narrative in which one of the protagonists is infrastructure major Tata Projects Ltd.
Take the example of the river Dravyavati in Rajasthan’s capital city of Jaipur, which is being transformed from a filthy, narrow, sewage-carrying drain back to a clean water body that adds beauty to its landscape. Tata Projects is rejuvenating the 47-km long river by sculpting its course, dredging its bed, adding several sewage treatment plants, and landscaping its banks with trees and gardens. In short, reviving a dead river.
Then there is the Lucknow Metro, a 3.6-km stretch of which runs underneath a heavily crowded area and several historic buildings. Using state-of-the-art equipment, Tata Projects completed the underground tunneling without disturbing the public or the buildings, that too well before time. In short, modern transportation for an old city.
A modern nation runs on its power generation capacity and India got the super critical 1,600MW Krishnapatnam power plant in 2014 in the southern state of Andhra Pradesh. What’s special about this plant is that it was designed to run on sea water and recycled sewage water from residential areas. In short, a thermal power project that reduces environmental impact.
A new railway line, designed to take the weight of cargo movement, is being constructed across the north of India. The dedicated freight line will speed up both cargo and passenger movements. Tata Projects is using automated track laying machines to construct about 350km of this stretch in Uttar Pradesh. In short, a smarter, more efficient railway.
India’s growth story goes hand in hand with its renewal story, and that is the intersection at which Tata Projects has positioned itself. This business strategy is working wonders for the infrastructure major, which has grown rapidly to occupy a top-3-in-India ranking.
That is the point when Tata Projects decided to play it smart and shift laterally from industrial infra to emerging spaces — smart cities, metros and railways, and water — in other words, riding the India development wave. The wisdom of that move is now reflecting in the fortunes of the company. “In the last three years, revenue has jumped from the 36 billion level (FY14) to over 60 billion in FY17 and we hope to touch 90 billion in FY18. More important, our order book was at 70 billion in FY14 and today it is at 320 billion. At any point in time, we have about 130 live projects,” says Mr Deshpande.
One of the most happening spaces in India is urban infrastructure and that is where Tata Projects has gained a firm foothold. “It’s an exciting time for us — we are present in five metro projects in India; we are constructing buildings, roads and bridges; and we are contributing to smart cities,” says Vivek Singhal, COO of the urban infrastructure vertical.
The vertical was started from scratch in 2013. “We built the team, brought in design and engineering resources, and worked on getting the company’s prequalification in order. We were very new to the game but we had the Tata brand name and our delivery credentials in the industrial infrastructure space were very good,” says Mr Singhal.
One of the toughest projects for the new team was one of the early babies — the Delhi Metro. “It was a very challenging job because the metro runs through heavy traffic areas. We had to take care to make the construction as seamless as possible. A lot of innovation was done for this project,” says Mr Singhal. One of the ways the team speeded up the work was to use precast technology — concrete pieces were cast in a yard and assembled on site.
Today, apart from the Delhi and Lucknow metros, Tata Projects is a participant in the Ahmedabad elevated line, and two of Mumbai’s underground and elevated lines. The company is also the frontrunner for a part of one of Mumbai’s biggest infra projects to date — the 170 billion, 20-km long Mumbai Trans Harbour Link that aims to connect the city with Navi Mumbai across the creek.
Another pie that Tata Projects is eyeing is the Smart Cities initiative, which involves making city lighting more efficient, ensuring smoother traffic management and improving urban security through surveillance camera networks. Here, Tata Projects is executing the smart street lighting project in Pune. “We are doing a tremendous amount of work…not bad for a 4-year-old business,” says Mr Singhal.
The rapid rise of the urban infra business underscores a truth that the MD points out — today government sector outlay on infra far outstrips private sector spending on capex projects. Tata Projects’ current showcase project — the 16.77 billion Dravyavati river rejuvenation — and about 120 billion worth of Dedicated Freight Corridor projects are an example of this.
“The Dravyavati river project is very close to our heart because the idea came from us. In 2016, the company approached the Rajasthan chief minister with an unsolicited proposal. The CM liked the idea and the state government floated a Swiss challenge. No other bid was lower than ours or could match the expert knowledge we brought to the plan, and that’s how we won the contract,” says K Satyanarayana, vice president and head of the company’s newest vertical — the 4-year-old construction and environment (C&E) business.
For the river project, Tata Projects has tied up with China-based SUCG for technical expertise. The river rejuvenation project has been designed with several layers so as to deliver value to the city of Jaipur in multiple forms — reducing health risks, recharging the groundwater table, increasing green cover, creating community spaces, adding beauty to the urban landscape and so on (see box).
What’s remarkable is that the project will pay for itself over time. “Land value around the river is going up and this will generate revenue for the state,” points out Mr Satyanarayana. The success of the Dravyavati project has opened up prospects in other cities such as Hyderabad, Pune and Nagpur. “River renewal can be a business by itself,” says Mr Satyanarayana.
The river project falls under the water and environment silo of the C&E vertical, which also handles a wide range of construction activity. Tata Projects has worked on a crafts museum and the Diesel Locomotive Works in Varanasi, the nuclear power plant facilities in Kalpakkam and Kota, and four hospitals in different parts of India. The C&E vertical accounted for a fifth of Tata Projects’ revenue in FY17, and is now exploring work in the naval and marine space, such as ports and jetties.
Metros and rivers are new experiences for Tata Projects, but a majority of its revenues still flow from older businesses. The transmission and distribution (T&D) vertical, set up 15 years ago, is going stronger than ever and accounted for a third of Tata Projects’ revenues in FY17. The company not only leads the T&D space, it has built a solid reputation in the market.
“We have set up transmission towers in some of the toughest terrains,” says Vivek Gautam, COO and head of the T&D vertical. Tata Projects has put up towers on mountain tops and other places where there are no roads. “We have climbed up to Mansarovar and Kargil, and we have worked in places like Tawang and Dokhlam, where the border is just a few feet away,” says Mr Gautam who also recalls the standing ovation from the customer when the company completed the 1,200 km Bareilly to Champaner line on time.
What Tata Projects brings to the table is the promise of delivering tough projects on schedule. “We have transported tower equipment that weighed 75 tonnes up hilly terrain, using helicranes for transport and assembly, a technique that was never used before in India,” says Mr Gautam.
Yet even this business has changed in nature over time. Where earlier the company would work only for public sector units, today projects are coming in from private players such as Sterlite and Adani. “We are now doing more intra-state projects and last mile connectivity. There are projects for rural electrification, solar power plant off take and railway electrification,” explains Mr Gautam.
The unit’s competencies have also led to international business coming in — one of the new projects, and the biggest to date, is a 9.3 billion T&D project in Ethiopia. There are transmission projects lined up in Africa — Kenya, Somalia, Cote d’Ivoire, Zambia and South Africa. New projects are slated in Nepal and Thailand, and even the Kyrgyz Republic and Kazakhstan.
Strangely enough, Tata Projects’ biggest international footprint comes from one of its smallest businesses, a division that started out as an internal testing, inspection and verification (TIV) unit. Renamed as quality services (QS), it became a business division in its own right 20 years ago and today serves about 1,000 clients all over the world. “About four years back, we decided to scale up and ramp up our services. We are now among the top TIV organisations in India and we work with a host of companies, even competitors,” says Tenny Cherian, COO of the QS division. The division has over 300 people sitting in offices in 40 countries. “We generate about 2 billion in revenue. We are a small ticket business, but quite profitable in our own right,” says Mr Cherian.
In recent years, the QS division has got a jolt of fresh energy through forays into new niche areas such as certification for food, water and yoga. Tata Projects acquired FoodCert India last year and is now a registered certifier for food manufacturing facilities.
Water holds huge potential: last year, the QS business was involved in developing technologically advanced, Internet of Things (IoT) enabled, remote controlled, water treatment plants. The division also runs reverse osmosis water plants in remote villages in 2,000 locations across India. “This activity started out as a CSR initiative but has been given a new shape as a social business — in collaboration with Tata Trusts, the RO plants are being set up as local community enterprises that will provide livelihoods,” says Mr Cherian.
That sustainability vision runs through the entire company. Although Tata Projects’ biggest promise to customers is delivery on time, the company goes beyond that to make construction sustainable. “We look at ways to use alternate materials and reduce resources and energy. For instance, we use composites to replace plywood, we use crusher dust to replace sand, mix flyash in concrete and we prestress steel to make it stronger,” says Mr Singhal. The company has also shifted all its employees to mobile apps for collaboration and seamless functioning. “We are trying to become a paperless company,” says Mr Singhal.
Notwithstanding technology, the company is well aware that people — all 4,500 of them — are its biggest asset. It has invested in extensive learning initiatives to keep its managers and field personnel engaged and excited. There are training programmes on leadership qualities, soft skills, project management, contracts, etc. Tata Projects runs the EPC Academy, an in-house unit to enhance productivity and improve competencies. “We wish to develop the EPC Academy into a centre of excellence,” says Sudhakar Moorthy, vice president, HR.
The company hired plenty of new blood in the last few years when business went through the roof. One of the tasks for Mr Moorthy’s team was to work with employees to integrate them with the Tata culture and build a sense of ownership and pride in the company brand. “Our employee engagement scores have improved in the last couple of years,” says the HR honcho. Attrition rates are at 9.2%, well below the industry average of 12%. The average age is a little high at 38 years. “We are now looking at hiring more entry-level trainees and fewer lateral hires. This should bring our average age down as well as our salary bill,” says Mr Moorthy.
Productivity and efficiency is one of the mantras at Tata Projects. This is where the procurement function has stepped up to ensure cost optimisation in the entire supply chain. This is critical for the entire organisation because about 70-80% of Tata Projects’ turnover flows through the supply chain. “The nature of EPC work is such that a large part of our turnover relates to cost of materials, equipment and resources,” explains Ravi Shankar, vice president and head of supply chain management. About four years ago, when Tata Projects was in the doldrums and looking to prop up its bottom line, the procurement team devised a new strategy for sourcing at optimal efficiency. “We developed an approach of category-based sourcing and developed a strategy of aggregation,” says Mr Shankar.
The company created four categories. Category one was bulk materials like steel, cement and concrete, and category two was engineering products such as cables, switchgears, etc. Instead of sourcing per project, the company created a master plan for the entire year, and opted to buy products in both these categories in bulk. “The higher volumes gave us greater negotiating strengths with manufacturers,” says Mr Shankar. Category three is specialised packages for a plant — say coal handling equipment or an HVAC unit. “These are large-value packages and since we have large requirements, we are able to negotiate better payment and delivery terms,” says the supply chain head. The last category is people — contract staff such as plumbers, electricians, civil workers, etc. “We were able to save money by shifting from using large contractors to medium- to small-sized firms,” says Mr Shankar.
That focus on productivity and efficiency has helped Tata Projects stay profitable. Another strategic move has been the use of technology to make operations more efficient. “Digitalisation and cutting-edge technologies give us an advantage,” says Mr Deshpande. Industry 4.0 for Tata Projects has translated into increased use of technologies such as 3D modelling, 4D toolkits, data analytics to measure quality and drone technology to capture field data. The company is also partnering Tata Consultancy Services (TCS) to digitise its bidding and estimating process.
That future vision is also apparent in the way Tata Projects has derisked its business steadily over the last few years. Seeing the way the funding winds were blowing in India, it has imbibed the competencies necessary to build the cities of the future. “Clean water and sanitation, smart lighting, multi-modal transport, automated traffic management, security and surveillance — these are the needs of India’s cities. In collaboration with partners like TCS and Tata Communications, we want to be leaders in this space,” affirms Mr Deshpande.
Smart footwork has been the key to survival and growth of the organisation. With its focus on smart projects and smart cities, Tata Projects seems to be rightly placed to ride the new India wave.
The complex vision for the Dravyavati river rejuvenation project sets it apart from other construction projects. It involves a 47-km stretch that starts in the Amber hills and meanders through Jaipur city.
The work started with clearing out tonnes of garbage that had accumulated downstream. Tata Projects is also straightening the river channel and lining the sides with cement. The bottom of the new channel has been designed so that water can seep and recharge the groundwater table. A special concrete is being used that supports aquatic life.
Work has started in most parts though Tata Projects is facing challenges in right-of-way and encroachment issues at a few stretches. The biggest task is to manage the waste water that was being pushed untreated into the river. To deal with this, the company is setting up five sewage treatment plants which will treat 170 million litres of waste water per day. The treated water will no longer be a carrier of disease, and in fact, will be able to support aquatic life. Jaipur floods occasionally during heavy rains. “The project is also a flood control measure,” says project director Colin Batchelor.
In addition to the river revival, there is the riverfront component — the river banks are being beautified with walkways, thousands of trees, landscaped gardens, amphitheatres, a convention centre and even a project experience centre. The river project is unique in many ways. “The river will be here for generations; the project is a legacy for the city,” points out Mr Batchelor.