Construction tenders floated in Dec qtr see 70 pc yearly growth

Chennai: Tendering activity for construction works has further picked up momentum in the December quarter as tenders floated in the quarter registered a yearly growth of 70 per cent and a 15 per cent sequential growth.

In the December quarter, tenders floated across all divisions in the construction space increased 70 per cent from Rs 3 lakh crore to Rs 5.25 lakh crore. On a sequential basis, the quarter saw 15 per cent growth over Rs 4.5 lakh crore tenders floated in the September quarter. From the slowdown seen in the June quarter, when overall tenders floated recorded a low of Rs 1.4 lakh crore due to the general polls, tendering activity has made a significant rebound. However, it is still lower than the March quarter when tenders worth Rs 7 lakh crore were floated.

Roads accounted for the largest share of tenders floated at 30 per cent followed by buildings at 22 per cent, power 21 per cent, and irrigation and sewage 16 per cent. The share of road projects was down compared to 38 per cent in the September quarter and 42 in the same quarter last year.

Power projects are gaining traction with their share going up from 10 per cent in September quarter to 20 per cent in the December quarter. Railway projects saw a dip in share from 20 per cent in the first quarter, 11 per cent in the second quarter and 7 per cent in the third quarter.

However, when it comes to the total tenders awarded, the slowdown continues as at Rs 1.4 lakh crore awards were down both yearly and sequentially. Power accounted for 42 per cent of the tenders awarded, much higher than 28 per cent in the same quarter last year. The share of roads was just 15 per cent.

However, with the tenders floated seeing an increase in the December quarter, awards are expected to rise in the subsequent quarters.