Here is Why Northeast a Big Market for Construction Equipment Manufacturers, Rental Companies

The government has been giving special attention to infrastructure development in the North Eastern region of the country, especially on the road, railway, communication, and telecom network in all eight states of the region, including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.

Finance Minister Mr. Arun Jaitley has increased allocation for the North East region in Budget 2017-18 to Rs 43245 crore from Rs 32180 in the previous budget and also increased the allocation of Ministry of Development of North Eastern Region (DoNER) to Rs 2682.45 crore from Rs 2524.42 crore.

“Railway ministry has big plans for the North East, several new projects amounting to about Rs 13,500 crore have been sanctioned in this year’s budget, including new lines, bridges and an elevated rail track project from Kamakhya to New Guwahati at a cost of Rs 3,062 crore,” Mr. Rajen Gohain, Union Minister of State for Railways was quoted as saying by the Outlook India. He said while speaking during infrastructure development conference at ConMac 2017 in Guwahati on 3rd March.

In July last year, the Railway minister Mr. Suresh Prabhu had said that railways would invest over Rs 7,000 crore in the current financial year to develop rail infrastructure in North Eastern states.

Hon’ble President of India, Mr. Pranab Mukherjee announced that all meter-Gauge tracks will be converted to Broad-Gauge in North Eastern states by the end of the year, he said while addressing a joint session of both Houses of Parliament on the eve of Budget presentation. The central government proposed broad-gauge connectivity to all North-Eastern state capitals by 2020.

The development of the road is single most important demand in the North Eastern states and density of roads in the region is less than the national average.  The NER Vision 2020 emphasis in the expansion and development of the road network at all levels from National Highways to rural roads. Thus, construction of roads and highways in North Eastern states is the utmost priority for the Central and State governments. Therefore, both states and the central government have taken up a massive programme to expand the road network in the region.

The Ministry of Road Transport and Highways (MoRTH) is primarily responsible for the development and maintenance of National Highways in the country. The Ministry allocated Rs.612.61 crore for repair and maintenance of NHs in the North Eastern Region in current year (2016-17), and Rs.979.92 crore during last three years.

For the better road connectivity in the region, The National Highway & Infrastructure Development Corporation Limited (NHIDCL) has started development work and so far projects aggregation to 1188km at a cost of Rs.14,830 crore.

According to the MoRTH, as of 18th October 2016, NHIDCL was handling 134 National Highway and other road development projects covering a length of about 8,007 km in the North East states which was to be executed at a cost of approximately Rs. 100,000 crore.

In August 2016, the government had informed the Parliament that 197 road building projects of a length 4320.95 km were undergoing which being implemented under various programmes or schemes of  the MoRTH in North Eastern states at a cost of Rs 37691.05 crore. The 20 major railway projects of a length of 2624 km had been taken up at a cost of Rs 52030 crore in the region. While, for the development of telecom, Comprehensive Telecom Development Plan at a cost of Rs 5336.18 crore was under the implementation in the region.

The North Eastern Council (NEC) implemented 715 various development projects at a total approved cost of Rs 7148.65 crore in the North Indian states and the Ministry of Rural Development has been also assisting respective state governments under PMGSY programme. As of 5 August 2016, the Ministry of DoNER had also released an amount of Rs 4113.31 crore for the developments of 608 roads and bridges under NLCPR.

The huge investment in the eight North Eastern states indicates the scope for the construction equipment manufacturers in the region as the massive infrastructure development in the region will create a huge demand for construction equipment. Looking at the demand from this region, Confederation of Indian Industry (CII) organised the second edition of ConMac 2017 (Construction Equipment Exhibition for North East) in a partnership with Indian Construction Equipment Manufacturers’ Association (ICEMA) in Guwahati on 2nd to 4th March 2017.

The ConMac 2017 witnessed the presence of major construction equipment companies such as JCB India, SANY, Tata Hitachi, SCHWING Stetter, ACE, Kobelco Construction Equipment, Bull Machines, Safari Construction Equipments, Rhino Road Equipments, KYB-Conmat, Ashok Road Equipments and Manufacturer, Ajax Fiori Engineering and others.

The investments in the region will also benefit rental companies in the North Eastern states as many contractors started renting heavy construction machines in order to reduce their project cost.

Source: Information has been obtained from GoI, Outlook India, ConMac

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s