Tata Projects, the engineering and construction arm of Tata Group, aims to turn profitable in this financial year as a large part of the projects that were affected due to Covid-19 pandemic and high commodity prices have been completed. It posted a consolidated loss of ₹856 crore on operational revenue of ₹16,948 crore in FY23. The order backlog of the company stood at ₹48,000 crore in March 2023.
The company has sharpened the segmental focus and customer mix and realigned the organisation to ensure predictable project delivery for the transformation, says Vinayak Pai, managing director, Tata Projects. It has been contracted to build the Noida International Airport, which will have an initial capacity of 12 million passengers. It has completed the new Parliament building project and the Mumbai Trans Harbour Link is at an advanced stage of execution.
The ₹3,500-crore Jewar International Airport, Noida, is expected to be completed by October 2024. The Pune Metro Line project, which has a project value of ₹1,100 crore, will be completed by March 2025. Another project, the ₹1,750 crore HRRL Barmer Refinery will be completed by September 2024. The new Parliament building has a tendered cost ₹862 crore and the redevelopment of Central Vista Avenue has tendered cost ₹477 crore.
“The normal project cycle comes to 12-18 months for us. But there are projects that go for 3-4 years. So, the average cycle comes to 24-30 months,” says Pai. At present, the primary target of the company is to get back to profitability in this financial year, he adds.
The company has a significant portion of contracts, which are largely government contracts, stuck in arbitration. It takes three to four years for resolution, says Pai.
“We are making conscious decisions to do more private sector projects, especially for the Tata Group companies, as part of the turnaround plan. There is a significant amount of investment coming into the steel and metals industries. We also have a lot of work in the sectors like electronics, data centres, semiconductor manufacturing, and airports,” says Pai.
Tata Projects recently announced its collaboration with Micron Technology to construct an advanced semiconductor assembly and test plant in Sanand, Gujarat. The project spans 93 acres of land in the Gujarat Industrial Development Corporation area of Chaarodi, Sanand. The construction of Phase 1 will include a 5 lakh sq ft cleanroom space, scheduled to be operational by late 2024.
The recently inaugurated new Parliament building was one of the critical projects of the company, says Pai. “There are a lot of heritage buildings, including the Parliament House in the vicinity. So, we had to take a lot of care by putting vibration monitors on the adjoining structures. The access to that area from Raisina Road is limited. So we had to put our labour camp and a precast facility nearby and get it. When all the construction material comes, we had to have wheel washes for the roads and maintain cleanliness on a continuous basis,” he says. There are provisions built into the Parliament building contract for commodity price increases and the logistics issues, he adds.
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