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Infra tenders jump 27% in Nov due to health, water projects

Infra tenders jump 27% in Nov due to health, water projects

Tendering activity is still down 2 per cent, y-o-y, on a trailing 12 months basis, despite a low base in the previous year, the Emkay Global Financial Services report said

Tendering activity rose 27 per cent, year-on-year, in November on a low base but was down 2 per cent on a monthly basis. The pick-up in tenders was mainly driven by sectors such as community services (up 1.5x), water supply (up 1.8x), and hospitals (up 87 per cent), said an Emkay Global Financial Services report. Among large sectors, roadways were up just 5 per cent, while Railways were down 2 per cent, on a yearly basis.  

The average monthly run rate of tender value in FY19 was Rs 76,500 crore, while it has been around Rs 48,000 crore post FY19. As compared to this, November tenders stood at Rs 60,000 crore. Tendering activity is still down 2 per cent, y-o-y, on a trailing 12 months basis, despite a low base in the previous year, the report added.

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Key tenders published during the month includes construction of greenfield ports at Ramayapatnam and Bhavanapadu worth Rs 2,600 crore each by the AP Maritime board, several packages of Delhi-Amritsar-Katra Expressway by NHAI worth Rs 8,170 crore and construction of fishing harbours at Juvvaladinne, Nizampatnam, Machilipatnam & Uppada by the AP Maritime board worth Rs 1,200 crore.

Further, the awarding activity last month, in value terms, was down 42 per cent from year-ago period and 13 per cent month-on-month, excluding L&T's order wins. The total awards stood at Rs 16,400 crore compared with a monthly run rate of Rs 28,200 crore for FY19 and Rs 15,800 crore since then, the report added. The tally of awards does not include orders won by L&T for a year on comparison as it has stopped reporting exact order value since April 2019.  

"For FY21 as a whole, we believe that with the fiscal situation of both the centre and state governments already under pressure and further worsening likely due to Covid-19, tendering and awarding activity will remain subdued," the report said.

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