Project tendering activity in the country continued to worsen for the sixth consecutive month in a row during February this year.
Project tendering activity in the country continued to worsen for the sixth consecutive month in a row during February this year. The tendering activity in terms of value fell 54% year-on-year (y-o-y) last month and 15% on a monthly basis. On year-to-date (YTD) basis, the FY20 tender value was down 42% y-o-y.
Key tenders released during February 2020 include the construction of tunnels, bridges, yards, formation, shaft, among others, in Uttarakhand; a water supply scheme in Uttar Pradesh (UP) and design and construction of 10 elevated stations in Mumbai.
“We note that except for August 2019 (up 4% y-o-y), the tendering activity has declined consistently since April 2019, which suggests award activity too will remain weak for at least the next two quarters,” Emkay Global Financial Services said in a report.
During February 2020, sectors reporting a decline in tendering activity included roadways (down 66% y-o-y), irrigation (down 90%), community services (down 52%), real estate (down 56%), power distribution (down 84%), hospitals (down 35%) and water supply (down 13%). On the other hand, railways (up 98%) and water treatment (up 57%) were the only sectors which recorded growth.
Project awarding activity was a mixed bag during February. While awarding activity fell 14% y-o-y, it grew 22% on a month-on-month (m-o-m) basis.
Sectors which recorded a growth included irrigation (up 119% y-o-y), real estate (up 77%) and power equipment (up 1,000%), whereas the under performing sectors included roadways (down 45%), railways (down 62%), water supply (60%) and power distribution (down 67%).
The total value of tenders published in February declined 54% y-o-y and 15% m-o-m. Major declines were reported in roadways, irrigation, community services, real estate, power distribution and hospitals. Railways and water treatment were the only notable segments that reported growth.
Major orders finalised last month include a Rs 1,600 crore contract won by PNC Infratech for rehabilitation and upgrade of a NH stretch for Unnao-Lalganj section in UP, a Rs 1,600 crore contract won by Mantena Constructions in JV with Gaja Engineering for construction of pressurised pipe system in Sagar district of MP and a Rs 1,300 crore contract won by Ahluwalia Contracts for construction of AIIMS Jammu.