The Hindu Business Line : `Delhi airport modernisation contract major milestone for L&T'

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Chennai Feb. 5 Larsen and Toubro Ltd believes that bagging the contract for expanding and modernising the Delhi international airport is a significant milestone for the company.

It will give a new dimension to the way the company goes about dealing with contracts, says Mr K.V. Rangaswami, whole-time Director and Senior Executive Vice-President (Construction), L&T.

It may be recalled that L&T bagged the contract valued at over Rs 5,400 crore from the GMR-led Delhi International Airport Pvt Ltd for the expansion and modernisation of the Delhi international airport. The order involves designing and constructing the airport.

Designing

L&T, according to Mr Rangaswami, has hired some specialist expatriates with experience in designing airports. The company has experience in constructing airports, but the Delhi airport contract goes much beyond that.

The contract includes constructing a 4.43-km long runway, touted to be Asia's longest, a modern passenger terminal with a total built up area of 4.8 million sq ft and associated facilities.

Mr Rangaswami, who heads the Chennai-based Engineering, Construction and Contracts (ECC) Division of L&T, says the company will study some of the large international airports in the world, especially features such as baggage handling and security to incorporate them for the Delhi airport.

The project is slated for completion before the Commonwealth Games in Delhi in 2010. The contract is among the biggest that the company has bagged and gives a new perspective on future orders, according to him.

Opportunities

On the ECC division, he said there were good business opportunities across sectors in West Asia. The company had set up a ready-mix concrete plant with a capacity of 240 cu m in Dubai.

The company would set up ready-mix concrete plants in Abu Dhabi, Ras Al Khaimah, Sohar and Muscat in Oman.

L&T, Mr Rangaswami said, would concentrate on the hydrocarbons sector in Qatar and Kuwait, and in all types of construction activities in the other emirates. West Asia and Africa would remain the company's focus areas for overseas projects.

Revenue from overseas projects would account for a fifth of the ECC division's turnover for the year, which was likely to cross the Rs 10,000-crore mark. For the nine months ended December 31, 2006 the ECC division earned an income of about Rs 8,530 crore.

In the third quarter of the year, the division's income was Rs 3,160 crore of which overseas income accounted for Rs 615 crore.

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