The Southern Surge

Font Size

Print

Feedback

Email

Discuss

Related Articles

I want to compete with Chinese products: JainReliance oil deals with Kurdistan illegal: IraqReliance oil deals with Kurdistan illegal: IraqJapan's Pioneer plans full-fledged entry into Indi...

GMR, GVK which have won the bids to modernise and operate the New Delhi and Mumbai airports outside their small sphere? The former has just announced that it is part of the consortium building Turkey’s second international airport. Add to that Lanco which won a bid for the Rs 16,000-crore, 4,000 MW Sasan ultra mega power project astounding big names like Reliance (though currently it’s in a legal limbo). In just a few years, these companies have become big names in the country's infrastructure arena, having pipped old and established names to the post.

Another amazing fact: more than half the Rs 52,000-crore contracts of the National Highways Authority of India have contractors from Andhra Pradesh involved in them either directly or through joint ventures. Nearly a third of all government construction projects like roads and power projects — both central and state-sponsored — in the country have an Andhra connection. Companies such as IVRCL Infrastructures and Nagarjuna Construction Company too are on the fast track of growth.

What is surprising is that unlike IT, ITeS and pharma, there is neither a traditional knowledge base nor a competitive advantage that has been the fertile womb for companies to take birth there. “Andhra has traditionally been a land of contractors and construction a significant part of the state economy,” explains a senior executive of an old infrastructure major. By 2020, says a UN report, construction will contribute a tenth of the state’s GDP. A peek into history appears to have a logical explanation for this. Large irrigation projects that came up in the 1960s and 1970s, say business historians, was the breeding ground for contractors who grew into infrastructure companies. For instance, GVK Industries and Gayatri Constructions first cut their teeth at the Nagarjunasagar multipurpose dam in the late 1960s. Founders of both families — as also most of Andhra Pradesh’s other construction firms — have an agricultural background. However, unlike its pharma and IT bretheren, it is the second generation which is driving the growth.