Based on 30 years of experience in India, Tata Projects Limited (TPL) is in growth mode as it takes on some of the country’s largest infrastructure projects, at the same time looking at the opportunities thrown up by the energy boom in the Middle East.
Tata Projects is an engineering, procurement and construction (EPC) contracting company. Established in 1979, it is one of very few Indian construction companies to acquire the triple certification of ISO 9001, 14001 and OHSAS 18001. Headquartered in Hyderabad, India, the company has regional offices in Mumbai and Abu Dhabi, UAE, as well as inspection offices in the major Indian centres of population.
Though it has been around for more than 30 years, TPL has achieved remarkable levels of growth since 2005. Its turnover went up five times to hit $600 million in the financial years 2009/10; its manpower increased threefold over the same period to over 2,000 (on the books, that is, not counting sub-contract labour); and the number of active project sites grew from 20 to more than 80 over the period. As A K Misra, executive director and chief operating officer, says: “TPL would not have reached today's position without the dedication and commitment of its employees.” No surprise then that on October 19 2010 in the presence of India’s most influential infrastructure leaders, top technocrats and industrial magnates, TPL was recognised by Construction World as the third fastest growing construction company in India by the governor of Maharashtra.
TPL is organised into seven business units, each of them having powerful synergies within the Tata organisation. Six cover the major segments of infrastructure, and define the core competencies of TPL: power generation; transmission and distribution; water and waste water; railways; metals and minerals (basically the steel industry, the core international activity of Tata); and oil, gas and hydrocarbon. The seventh business unit covers quality and inspection services across the spectrum of all these activities.
Naturally enough the bulk of TPL’s work is still carried out in India, where it is involved in a large number of megaprojects in different locations. Among the most significant of its current commitments is the EPC stage of what is so far India’s largest balance of plant (BoP) contract in the Indian power sector. Awarded by Andhra Pradesh Power Development Company Limited (APPDCL) in 2009, for its 1,600MW super critical coal-fired Sri Damodaram Sanjeevaiah power station near Krishnapatnam in the Nellore District of Andhra Pradesh, this project is worth a massive $633 million and is due for completion in 2012. It involves the basic and detailed design, engineering, manufacture, procurement, supply, construction, erection, testing and commissioning of all the BoP systems and associated equipment.
More recently, in December 2010, TPL was awarded a $450 million contract for the construction ofa 1,000MW power plant addition for Maharashtra State Power Generation Company Limited (MAHAGENCO) at Bhusawal. This is an extension of the existing 478MW coal fired power station and will involve EPC inspection, testing, commissioning and performance guarantee tests in the BoP package, including the complete civil works and infrastructure facilities.
While these projects convey a sense of the scale and vitality of the Indian energy sector and TPL’s engagement with it, at a time when similar projects are being shelved elsewhere in the world, they only represent a single part of the company’s overall activity. It is finding plenty of opportunities elsewhere in the home market—for example last year TPL signed a $278 million contract with NMDC for the turnkey supply of a 4,060 cubic metre blast furnace for expansion of a steel plant at Rourkela.As Misra commented: “The Rourkela blast furnace will be one of the biggest, most modern and sophisticated blast furnaces ever commissioned in India.”
TPL’s portfolio reflects its well-diversified business segments, and this has helped it to mitigate the impact of slowdown in any one line of business. Misra feels this has been a big factor in seeing it though the vagaries of the world economy in recent years. Prudence has been another factor: “We have strategised our customer groups and market segments such that the greater part of our order book is from government-funded projects, where the investment commitments are more robust.”
Now TPL is taking these policies and applying them aggressively outside of India in a series of acquisitions and joint ventures—especially in the Middle East. TPL acquired a 75 per cent controlling stake in Artson Engineering Limited (AEL) in January 2008. AEL, though loss making at the time of acquisition, was one of the leading design, engineering, procurement and construction companies in petroleum storage and handling systems. The company has been successfully turned round, aggressively pitching for contacts in India including the construction of four crude oil storage tanks at Shri Guru Gobind Singh Refinery; and it is currently constructing a major oil terminal for Emirates National Oil Company (ENOC) at Fujairah.
While the acquisition gave TPL an entrée into the Middle East markets, its engagement was strengthened when it established a joint venture company with Al-Mashrik Contracting Company of Saudi Arabia, an established contracting agency in the power, infrastructure and industrial markets. TPL holds 30 per cent of the equity in the joint venture—the Al-Tawleed Energy & Power Company—which in April 2007 signed its first contract with Siemens Power Generation Group for the installation of the electrical, mechanical and C&I work for the 900MW independent water and power plant at Shuaibah, 110 kilometres south of Jeddah, which includes an 800,000 cubic metres per day water desalination plant.
Another joint venture, Teil Projects, formed in conjunction with Engineers India Ltd in 2007, has successfully bid for processing and refinery work as well as small scale industrial power generation up to 60MW. It is engaged in a project for RAK GAS, which sources gas from the Bukhaand West Bukha fields in Oman in which it is revamping the control system of the gas processing train. At $4 million, this is not one of TPL’s larger commitments—but when taken with the Fujairah project and a distribution network and metering station for a power plant at Al Jazirah in Ras Al Khaima Emirate, Misra believes it shows an ability to deliver projects in the competitive environment of the Middle East. www.tataprojects.com
