Real Estate Intelligence Service, Thursday, December 24, 2009

Green shoots taking firm roots: Pranab

Green shoots taking firm roots: Pranab
The Hindu Business Line, December 24, 2009, P15

Our Bureau, New Delhi

The Finance Minister, Mr Pranab Mukherjee, on Wednesday said that the green shoots of economic recovery were firmly taking roots and noted that the pre-crisis growth levels of 9 per cent was within reach in the next few years.

For India to return to the high-growth trajectory of 9 per cent on sustained basis, it was crucial that agricultural growth return to 4 per cent growth levels, Mr Mukherjee said at the 104th Annual Session of PHD Chamber of Commerce and Industry (PHDCCI) here today.

He also emphasised that India cannot return to the 9 per cent growth levels unless there was robust growth in the US, Japan and Europe.

Mr Mukherjee expressed confidence that the economy would grow between 7.5 and 8 per cent this fiscal. While the Prime Minister's Economic Advisory Council had pegged the GDP growth estimate for the current fiscal at 6.5 per cent, the Reserve Bank of India has pegged it at 6 per cent with an upward bias.

In the recent mid-year review, the Government had pegged the GDP growth estimate for 2009-10 at 7.75 per cent. The economy grew 7.9 per cent in the second quarter this fiscal, much higher than the 6.1 per cent growth in first quarter and 6.7 per cent in 2008-09.

“The target growth of 9-10 per cent that the country had for long dreamt about is now within our reach,” Mr Mukherjee said.

Challenges

The strong growth projections notwithstanding, there are many challenges like price rise, fiscal consolidation, generating resources for developmental programmes and bridging the skill gap, Mr Mukherjee said.

The Finance Minister said that the stimulus package was working and that the economic recovery underway vindicated its role. On the timing of winding up the stimulus, Mr Mukherjee said that the Government will take a call on at the time of the next Union Budget.

On the proposed new Direct Taxes Code, Mr Mukherjee said that he had an open mind on the nine areas of concern for industry and other stakeholders. The areas of concern include the proposal to levy minimum alternate tax (MAT) on gross assets basis and also taxation of the withdrawals under the small savings schemes (introduction of EET system of taxation).

Green shoots taking root; Budget could be the harvest time

Green shoots taking root; Budget could be the harvest time
The Financial Express, December 24, 2009, Page 2

fe Bureaus, New Delhi

The government has begun laying the groundwork for withdrawing the fiscal stimulus measures extended to India Inc to weather global recession. Finance minister Pranab Mukherjee on Wednesday hinted that some of the sops are likely to be rolled back when he presents the Budget for 2010-11 in February.

“Green shoots (of recovery) are now firmly taking roots. The recent data confirms it,” finance minister Pranab Mukherjee acknowledged for the first time while addressing PHDCCI’s annual meeting. ‘You have to wait till the Budget’ to know when the government will withdraw the stimulus packages, Mukherjee told industry captains.

Emboldened by strong quarterly growth, the government last week projected a GDP growth of over 7.75% in 2009-10, higher than the RBI estimate of 6% and the Prime Minister’s Economic Advisory Council’s 6.5%.

The economy grew at 7.9% the July-October 2009, as compared to 6.1% in the previous quarter. It grew at 6.7% in 2008-09. The government has projected a 6.8% fiscal deficit for 2009-10. Mukherjee added a growth rate of 9-10%, ‘which we have dreamt for a very long period of time is now within our reach and we have to achieve it.’

Speaking at the same seminar, Planning Commission deputy chairman Montek Singh Ahluwalia said, “There is a good chance that we end up better than 7% this year and the growth would be around 8% next year and even better in 2011-12.”

“If that would be the rates of growth, we should be ready to see roll back of stimulus measures. The decision has to be made by the finance minister in the Budget. Stimulus should not be expected to continue forever,” Ahluwalia added.

The indications are now clear that the government is preparing itself to withdraw the fiscal stimulus, a process the Reserve Bank of India had already started for the monetary expansion by raising the statutory liquidity ratio in October.

FM upbeat, says GDP may grow 8% this year

FM upbeat, says GDP may grow 8% this year
The Economic Times, December 24, 2009, Page 9

Our Bureau NEW DELHI

INDIA’S economy may return to “spectacular” growth trajectory of 9% seen before the slowdown in the next two to three years despite nagging issues such as high food prices, fiscal slippages and low credit offtake, finance minister Pranab Mukherjee said in Delhi on Wednesday.

“The green shoots are firmly taking root,” he said, adding that the economy will grow at close to 8% in the current financial year if economic indicators continued to improve in the next quarter. India’s GDP grew by 6.7% in the last fiscal year, after clocking an average annual growth rate of more than 9% in the preceding three years. Stockmarkets cheered the projection, with the benchmark indices BSE Sensex and NSE’s Nifty gaining 3.2%, the highest single day gain in more than seven weeks.

“We expect the positive trend in the markets to continue on the back of better IIP and GDP growth numbers…. Significantly higher growth prospects in India compared to other developed and emerging economies will continue to attract FII inflows in 2010,” said K Ramnathan of ING Investment Management. Mr Mukherjee acknowledged that his growth projections were “a bit too optimistic”, but with good reason. “The high growth in second quarter and gaining momentum in the industrial output encouraged me to upgrade the growth projections,” he said.

Industrial production has been gathering momentum in recent months, giving further strength to economic activity. The growth in factory output as measured by the index of industrial production rose to 10.3% in October, picking up steam in successive months. With global trade beginning to pick up, the country’s exports grew 18.2% in November after contracting for 13 straight months. But economists and policy makers point out that the strength of global recovery can be assessed only after couple of months as the high annual growth in November was on a very low base.

Independent economists say the demand side of the economy is already robust, but note the government needs to address the supply-side issues. “The economy can achieve a sustainable 9% growth rate only if the supply side problems in infrastructure segment are taken care of,” said Indranil Pan, chief economist at Kotak Mahindra Bank. Analysts say improving economic growth prospects will help the government tackle challanges like mounting fiscal deficit — at a 16-year high of 6.8% of GDP for this year — and low credit offtake and rising inflation.

“We expect food price inflation to moderate slightly over the next four months, but it will still remain at 15% year-on-year in March,” Morgan Stanley economist Chetan Ahya said in a research note. According to the note released on Wednesday, the government will not go in for an aggressive monetary tightening despite rising food prices. With growth gaining momentum, the bond market expects the government borrowing to come down. With higher than expected direct tax collection offsetting the short fall in indirect tax collection, the debt markets do not see any need for additional borrowing, say bond market dealers.

“With the government hinting at a rollback of fiscal stimulus in the coming budget and the disinvestment proceeds coming in, the borrowings will be under check next year,” said Srinivasa Raghavan, head of treasury at IDBI Gilts.

Markets soar on global cues

Markets soar on global cues
Business Standard, December 24, 2009, Page 1

BS Reporter / Mumbai

Markets today surged after Finance Minister Pranab Mukherjee said economic growth may accelerate at a faster pace and the stimulus package would continue till the Budget. The feel-good mood got a further boost from a positive sentiment in the global markets.

The Sensex soared 539 points to regain the 17,000 level after six trading days and closed 3.23 per cent higher, at 17,231.11. The Nifty surged 158.75 points (3.18 per cent) to 5,144.60.

US markets rallied on Tuesday, on better-than-expected home sales data. The Dow Jones added 0.49 per cent to 10,464.93. The Nasdaq and the S&P 500 were also up. European indices were at a 14-month high. Asian stocks, too, ended in the green.

“The market moved up sharply today on the back of short covering by bears and build-up of fresh longs by bulls. The perception that the global economy is recovering faster than what the market was expecting, triggered buying,” said Avinash Gupta, assistant vice president, Research Equity, Bonanza Portfolio.

All sectoral indices were in the green as the metal index shone. The index jumped 4.05 per cent to 17,091.37. The metal stocks led the rally, with Hindalco gaining 7.77 per cent and Tata Steel 4.45 per cent. Both stocks reported a new 52-week high in trades today.

Oil & gas, power, IT and capital goods gained over 3 per cent each. Reliance was the star performer. It surged 4.62 per cent to Rs 1,065.90. Other heavyweights — Infosys, ICICI Bank and Larsen & Toubro — rallied 3-4 per cent each.

Banking stocks also gained sharply, with ICICI Bank rising 4.5 per cent on expectations that loan demand may rise. Housing Development Finance Corporation soared 3.2 per cent to Rs 2,645.05.

In a report today, Morgan Stanley economist Chetan Ahya said India’s central bank would probably raise interest rates at the end of January and won’t take any immediate steps to tame food price inflation that touched an 11-year high. “There appears to be little evidence to support the view that the rise in food prices has been driven by current loose monetary policy,” Ahya further said, adding, “the Reserve Bank is unlikely to tame food price inflation through monetary policy action”.

Maruti Suzuki added 1.83 per cent on news of a proposed launch of new multipurpose vehicle. PSU stock NTPC advanced 6.96 per cent. Realty stocks Jaiprakash Associates, Reliance Infrastructure and DLF jumped.

IT stocks rebounded after yesterday’s fall as data in the US showed the economy was on the path of recovery. Infosys jumped 3.28 per cent, TCS went up 2.80 per cent and Wipro advanced 2.11 per cent in trades today.

The BSE market breadth was positive. Out of the 2,922 stocks traded, 1,902 advanced, while 927 declined.

8% growth possible

8% growth possible
Hindustan Times, HT Business, December 24, 2009, Page 21

Finance Minister Pranab Mukherjee raised the level of optimism on the country’s economic growth on Wednesday, saying India’s GDP could grow by as much as 8 per cent in the current fiscal year, taking it beyond the peak forecast of 7.75 per cent made in the mid-term economic review tabled in Parliament last week.

It implies that the economy will grow at 9 per cent in the remaining two quarters of the year to make up for the slackness in the earlier quarters.

“If things go on as they are now, we expect the average growth could at around 7.75 to 8 per cent,” Mukherjee said. Mukherjee’s projections beat most analysts’ estimates.

“It would be more appropriate to say that it (growth) would be around 7.5 to 8 percent,” Mukherjee said at the annual meeting of the PHD Chamber of Commerce and Industry (PHDCCI).

"Some of the important issues and challenges in the short-to-medium term include price rises, (and) return to the path of fiscal consolidation," the minister said.

Mukherjee said farm output must grow 4 percent for the economy to expand 9 to 10 percent annually in the coming years.
The government will have to walk the wedge between fiscal discipline and a push for high growth. It has to decide the timing of rolling back the stimulus measures introduced to counter a downturn.

“You have to wait till the Budget," the finance minister said, replying to a question, when the government proposes to withdraw the stimulus packages.

The GDP growth has been improving from the 6.1 per cent in the first quarter (April- June) to 7.9 per cent in the second quarter (July-October) of the current financial year.

Mukherjee said a strong turnaround in the export sector may still be some months away.

“US, Europe, and Japan account for around 62 per cent of our exports and unless demand picks up in these economies the exports are not going to improve drastically.”

539 points: the biggest Sensex jump in 7 mths

539 points: the biggest Sensex jump in 7 mths
Hindustan Times, HT Business, December 24, 2009, Page 21

The country’s premier stock market index, the Sensex, jumped by 539 points – its highest single-day gain in seven months— and soared past the 17,000-mark on Wednesday as news from all around signalled an optimistic mood that ended a months-long lull in the share markets.

The finance minister’s talk of an 8 per cent GDP growth possible in the current fiscal year, overnight data from the US on the housing sector and buzz that local oil companies will get cash instead of bonds for fuels sold below market prices spread cheer among investors and traders.

The 30-share BSE Sensex rose 3.2 per cent on the Bombay Stock Exchange (BSE) as it closed at a two month high of 17,231. The National Stock Exchange’s 50-share Nifty also gained 3.2 per cent or 154 points to close the day at 5,144.6.

Overnight in the US, housing stocks led the way up with the Dow Jones U.S. home construction index up 3.9 per cent following data that showed U.S. existing home sales rose in November at the fastest pace since February 2007.

“The market lagged participation over the past 10 to 12 trading sessions but it got a direction today and the domestic mutual funds and the insurance players invested in the market,” said Aseem Dhru, chief executive officer, HDFC Securities.

Foreign institutional investors (FIIs), however, stayed away.

“The finance minister’s reassurance to continue stimulus packages until the next budget resulted in huge short covering,” said Alex Mathews, head of research, Geojit BNP Paribas Financial Services. Short covering is the process in which speculators who expect the market to fall end up buying because the trend goes the other way.

Earlier, Japan’s Nikkei 225 rose 1.9 per cent followed by gains of 1.1 per cent and 0.8 per cent in Hong Kong and Chinese stock market on the back of.US home resales data which showed a growth of 7.4 per cent for November against an expected 2.5 per cent growth rate.

In India, the gains were driven by the metal and oil & gas sectors which saw their respective indices at the BSE rise 4.1 per cent and 3.4 per cent.

igns of realty rebound

Signs of realty rebound
Hindustan Times, December 24, 2009, Page 23

Propelled initially by government stimulus packages and then by genuine demand from end-users in a recovering economy, real estate developers seem to be back in business. Some are tweaking up prices while others are tapping the capital market to grow. Anshuman Magazine, chairman and managing director, South Asia, at property consulting firm CB Richard Ellis, spoke to Hindustan Times about the state of the industry. Excerpts.

On the outlook for 2010, and Mumbai/Delhi markets

The year started on a discouraging note. However, from the third quarter onwards a reduction in prices, a softening of interest rates and an improvement in the economic sentiments led buyers coming back to the market. Both cities saw an increasing focus on affordable housing for the middle- income group, which resulted in the launch of several projects in the peripheries of Mumbai. In Delhi, developers re-modeled a number of projects to fit into the affordable housing segment.

There is a definite improvement in the activity level of the residential market. I expect this to sustain in 2010, especially in the affordable market segment.

On developers jacking up prices

The prices of certain projects have inched up. However, it is important to note that this is from an already discounted price and therefore from a lower price base. Secondly, the price movement depends on the demand and supply situation in the various micro-markets as well as the success of particular projects due to location, the developer, quality and price.

On commercial properties in Mumbai and Delhi

The last two to three months of 2009 has witnessed some improvement in the commercial and retail real estate in both cities. In the office market segment corporates are slowly returning to the market and office space take-up has improved. Besides the IT and IT-related companies, telecom and FMCG (fast moving consumer goods) companies have also contributed to the demand. However, 2009 has seen a huge amount of new office space supply coming into the market which will keep rentals at competitive levels in the medium term. With an improvement in the consumer sentiment, and competitive retail rentals, retail real estate too is ambling towards better activity levels.

On IPOs by realty companies

Some of the firms coming out with IPOs (initial public offers) do offer interesting options to invest. However, investors should look at the track record of the firms which are going in for these IPO’s, the real estate holdings and development plans they invest. It is still early days to presume that we are heading towards another bubble.

Indirect tax figures, exports pick-up point to gradual stimulus withdrawal

Indirect tax figures, exports pick-up point to gradual stimulus withdrawal
The Financial Express, December 24, 2009, Page 2

fe Bureaus, New Delhi

Putting greater pressure on its delicately balanced books, the Centre’s indirect tax collection is unlikely to match the Budget estimate of Rs 2,69,477 crore for 2009-10. “Indirect tax collections may fall short by Rs 20,000 crore to Rs 22,000 crore of the Budget estimate,” revenue secretary PV Bhide said on Wednesday.

Indirect tax receipts, comprising customs duty, excise duty and service tax, have shrunk by 21% in the first seven months of the fiscal, totting up just Rs 1.26 lakh crore compared with Rs 1.61 lakh crore in the same period last year. While part of this shortfall is due to the slowdown, some of it is because of the duty cuts announced as part of stimulus.

The issue was also highlighted by finance secretary Ashok Chawla on Tuesday when he said, “It is very unlikely that the estimates on the indirect tax will be met, but on the direct taxes front, we are maintaining that it will be more than met.” As per its Budget estimates (BE), the government aims to earn Rs 6.4 lakh crore from both direct and indirect taxes during the current fiscal.

A lower-than-estimated collection from indirect tax receipts put more pressure on the Centre’s fiscal deficit, which is projected at 6.8% of the GDP in 2009-10. Direct tax receipts and higher expenditure on heads like oil subsidy is already proving to be a threat to the deficit target. Already, the fiscal deficit at 61.1% of the BE by October end is straining government finances.

While the Central Board of Direct Taxes is hopeful of meeting the BE of Rs 3,70,000 crore for 2009-10 of direct taxes, it is worried that the internal target of Rs 4 lakh crore set up by finance minister Pranab Mukherjee may be unachievable. The Centre is also exploring how and when to compensate oil companies for under recoveries without hurting the deficit.

Though it has not made any provision for this in the first supplementary demand for grants, it will have to do so in the second supplementary Budget, expected to be tabled in the Budget session.

Speaking at an Assocham seminar on Wednesday, PV Bhide said the finance ministry is finalising the road map for the goods and services tax (GST). “The draft legislation on GST has been referred to legal experts and would be finalised shortly to enable the government achieve target of implementation of goods and service tax,” he said.

The Centre has also decided to subsume purchase tax in the GST ambit, said Central Board of Excise and Customs special secretary and member S Dutt Mazumdar. “A decision has to be taken on subsuming natural gas into GST. It is still subject to discussions between authorities concerned. Replacing electricity duty, levy of sugar and textile by GST is still not decided,” he said.

Rating agencies bullish on India growth story

Rating agencies bullish on India growth story
The Financial Express, December 24, 2009, Page 13

fe Bureau, Mumbai

In its latest report titled, ‘Asia-Pacific Outlook 2010: Returning Towards Normality’, Moody’s Economy.com has stated that after two tumultuous years, 2010 will resemble something closer to normal for the Asia-Pacific region.

The emerging giants — China and India will continue to drive the regional economy. With some of the Chinese government’s 4 trillion yuan stimulus still to be spent—and suggestions that further stimulus spending will be required — GDP growth in China will accelerate towards 9% in 2010. Boosted by the fillip from infrastructure and expected tourism spending ahead of the Commonwealth Games in New Delhi, India will expand by more than 8% in 2010 after this year’s relatively modest 6.1% growth rate. Also, Moody’s Economy.com expects the Reserve Bank of India to commence raising interest rates in the first half of 2010. The People’s Bank of China too will likely resort to adjusting bank reserve requirements and capital adequacy ratios to contain inflation, unsustainable credit growth and speculation in preference to using broad tools such as interest rates or currency appreciation.

Also, Standard & Poor’s, in its latest report titled, ‘Asia-Pacific Economic Outlook Q4 2009: Exit Strategies And Inflation Are Main Issues For 2010 As Region Recovers,’ observes that as Asia-Pacific is leading the world in economic recovery, so too will it lead the exit strategy. The next calendar year will see all Asia-Pacific economies adopt a tightening stance in one form or the other. This report provides an outlook opinion on Asia-Pacific economies based on recent data. The report’s author and director-cum-principal economist at Crisil, Dharmakirti Joshi, said that policy focus is gradually shifting from managing the crisis to managing the ongoing recovery. A critical challenge for all economies is how and when to exit from expansionary monetary and fiscal policies in a way that secures recovery. Most countries are likely to begin by exiting monetary easing and then gradually withdraw fiscal stimulus.

Another report by Standard & Poor’s titled, ‘Top 10 Expectations For Global Corporate Credit Markets’ indicates year 2010 as a turning point, characterised by overall prudence among market participants amidst a tepid recovery in mature economies and guarded optimism among emerging markets. In the report, Diane Vazza, head of Standard & Poor's Global fixed income research group notes that global outlook for 2010 is far from rosy, and additional risks might emerge from other key external variables, including geopolitical events and oil prices.

Bank of India to offer home loan at 8% for 2 years

Bank of India to offer home loan at 8% for 2 years
The Financial Express, December 24, 2009, Page 13

Press Trust of India, Mumbai

Public-sector lender Bank of India (BoI) is set to become the latest entrant in the home loan rate war, after biggies like SBI and HDFC, by offering 8% fixed rate for the first two years. BoI is planning to offer 8% fixed rate for loans up to Rs 30 lakh and is expected to come with an announcement by the end of this month, BoI’s executive director BA Prabhakar said.
We plan to announce this scheme (8% fixed rate for two years) probably by the end of this month. This wouldbe applicable for loans up to Rs 30 lakh,” Prabhakar said.

After the offer period, the rates will be calculated on a floating basis, based on the then benchmark prime lending rate, Prabhakar said.

With this, BoI will be joining the club of other leadingbanks in the country like SBI, ICICI Bank, Kotak IDBI Bank and homeloan financier, Housing Development Finance Corporation, who have already come with similar schemes.

This will intensify the existing competition among these players in the race to woo aspiring home buyers. A week back, IDBI Bank said it would offer 8.25% fixed rate for all its new loans till March 2012.

The lender has made this offer applicable for all new home-loan customers applying on or before March 31, 2010, andtaking a part or full disbursement during the offer period.

Presently, IDBI Bank is offering 8.75% for loans up to Rs 30 lakh, 9% for loans between Rs 30 lakh and up to Rs 50 lakh and 9.25% for loans above Rs 50 lakh.

Early this month, ICICI Bank, Kotak Mahindra and homeloan financier HDFC had announced special home loan schemes with fixed interest rate structure for a particular period, irrespective of the loan amount.

While ICICI Bank offered new home loans at a fixed rate of 8.25% for the first two years, irrespective of the loan amount, Kotak Mahindra Bank offered 8.49% fixed interest for 30 months.

The country's largest lender, State Bank of India set the ball rolling by announcing a scheme offering an 8% interest rate early this year.

Office space demand down 29% in 2009

Office space demand down 29% in 2009
The Economic Times, December 24, 2009, Page 5

Conservative Leasing By IT/ITeS Led To Dip, Recovery Seen In H2 Of ’10: Cushman & Wakefield

Ravi Teja Sharma NEW DELHI

COMMERCIAL real estate is hoping for a bounce back in 2010. For 2009 though, the year is ending with a 29% decline in space absorption compared to 2008, according to the annual year-end report by real estate consultancy Cushman & Wakefield. The total absorption of commercial space across major Indian cities stood at 26.3 million sq ft in 2009, compared to 37 million sq ft in 2008. This dip was primarily because of a conservative leasing approach by the IT/ITeS sector that accounts for majority of commercial office space take up (60%) in the country. But the outlook for the coming year is positive. “With the gradual recovery of the economy, the demand for office space is likely to increase by the second half of 2010,” says Sumit Rakshit, executive director, occupier services at Cushman & Wakefield.

Corporates have been cautious about expansion in 2009, both because of the recession and also falling office space rentals. Across India, there has been about 4.6 million sq ft of pre-commitments for space due to be absorbed over the next two years. Of this, Bangalore alone accounts for 2.7 million sq ft. This indicates the revival of the IT/ITeS segment, which is the mainstay in Bangalore. IT companies are starting to get new contracts which is pushing them to commit to new real estate costs.

Most micro-markets across the country witnessed 15-25% decline in rentals in 2009 over last year. The last quarter though has seen rentals stabilising, except in few locations such as Mumbai’s Lower Parel that saw the highest fall in rentals by 40% in the past year. Even Delhi saw a rental decline between 3% and 26% during the year. Because of an acute oversupply situation, Gurgaon is expected to see a further fall in rentals. Though 2009 saw a drop in expected supply, major cities recorded 51.8 million sq ft of new office space supply. With corporates starting to relook at leasing large spaces, this new supply is expected to be absorbed in the coming year. “Clients are starting to talk positive,” he adds.

Cushman & Wakefield sees a revival of rentals across all markets. “Corporates too are realising this. This is the right time to buy or lease property as rentals and capital values are still at their lowest,” he explains. On the developer’s side, the positive news is that stalled commercial office projects are being restarted.

“2009 was a tenants market. The coming year beyond, things will start to turn.”

Tata Realty to help develop box terminal

Tata Realty to help develop box terminal
The Hindu Business Line, December 24, 2009, Page 5

Looking to enter water supply, urban transportation projects.

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Partnership ventures
Siemens Project Ventures for a high-speed rail link project in Bangalore; with Atlantia, Italy, which operates over 3,500 km of toll roads in Europe, for road projects, and with Changi International for some airport projects; and Mitsubishi for rail projects.
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R. Balaji, Chennai

Tata Realty and Infrastructure Ltd (TRIL), which is setting up a number of large real estate development projects, is expanding into infrastructure projects, including a dedicated container terminal, logistics and warehousing, water supply and urban transportation projects.

Mr Sanjay G. Ubale, Managing Director and CEO, TRIL, told Business Line that the company has identified a location on the east coast where it will participate in developing a dedicated container terminal project. Talks are on with the State Government concerned, he said, while declining to elaborate further as the discussions were at a preliminary stage.

TRIL has identified a number of infrastructure verticals — other than telecommunications and power in which the Tata group is a market leader — that it plans to enter. The new areas are also segments in which TRIL is looking to partner with investors. In roads, where it is investing over Rs 300 crore and expects to scale up fast, it has identified an investor and will soon finalise the details.

TRIL has tied up with Siemens Project Ventures for a high-speed rail link project in Bangalore; with Atlantia, Italy, which operates over 3,500 km of toll roads in Europe, for road projects, and with Changi International for some airport projects; and Mitsubishi for rail projects, will look at more partners for its other infrastructure ventures, Mr Ubale said.

Logistics is another strong area of interest for TRIL, he said. In this vertical, it will set up warehousing infrastructure in Delhi, Kolkata and Mumbai where it has identified over 50 acres in each location. It would cater to all the major industrial segments in these areas, he said.

Water supply projects

It is in talks with a number of international players in logistics for technological support. It is also looking at water supply projects, particularly at areas of upgrading existing networks available with the utilities. Nearly, a third of the water supply in most modern cities is lost to leakage and theft, and investments in enhancing efficiency and supply side efficiency would save much larger investments in augmenting supply. TRIL is talking to local bodies to sell this concept.

The company is also looking at getting into water distribution projects in which it has in-house expertise, Mr Ubale said. It also hopes to bid for the Navi Mumbai airport project for which it plans to tie up with an international player.

In urban transport, developing monorails is an area that offers large potential. TRIL will bid for both the projects on offer by the Mumbai Metropolitan Region Development Authority.

In Chennai, where it is setting up a Rs 3,700-crore IT SEZ, commercial and residential project on the IT corridor, it has mooted a proposal for a monorail project with the State Government, Mr Ubale said. It has sought an alignment that would link the heart of the city with the entire stretch of the IT corridor and supplement the existing urban transportation systems, he added.