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Where is Rajaji? Eternal support for capitalisation of PS banks Bihar elections - the Rajaji formula worked Tribute – M V Murugappan CII projects higher growth… SoA @ 80 Tribute – UCAL Selvan… Breaththrough in malaria control Noble nonagenarians... The rise and rise of KCP Tough task taking states together More tributes to GR Return to king coal for urea... A welcome initiative by the judiciary Limit foreign borrowings to hi-tech, export potential projects... Poor quality of university VCs Preserving for the future A Grand Finale for SN’s MS centenary at the US… Tatas moving out of urea production... Things happen by accident and not by design... Nuclear power at the nucleus Russi Mody – a tribute Colour-Chem’s colourful KRVS Delhi is distant… China invests in India Moily’s bold thrust B H Kothari - a tribute Permanent secretariat for TN GIM The Gulf aviation boom The Jan Dhan bonanza Not just in-laws (and outlaws); they’ve renowned academics at the helm! 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Odisha: spectacular win by Naveen Patnaik Align crops to agro climate endowments… More Shakti to resource mobilisation... GNS - 100: our first subscriber A professional at the helm of IRDA... …and of a popular trade leader Come elections, come advertisements... Adapt Vajpayee dinner diplomacy Padma Bhushan for A Ramakrishna Shale gas and its shallow future TIAM turns a full cycle F C Kohli - his concerns all embracing Lalu’s envy, India’s pride Fortune for Indian Airlines Tribute – Manikam Ramaswami A rich pool of talent not utilised…. CIPET hqrs to stay at Guindy – for the present? Boy, can you beat these? Poor representation for Kerala and TN in Cabinet The ‘Jayanthi Tax.’ Vibrant Gujarat Why this malaise in medical education? Rahman at CIC Parliament in paralysis... The sea- saw battle continues... More Shakthi to Das’ elbow Road development slows down Gay abandon in pricing
 
L&T- the specialty of special purpose vehicles

A decade ago, engineering and construction giant Larsen & Toubro conceived a bold, new plan: to form separate subsidiaries or special purpose vehicles to focus on new projects. This enabled the company to access and acquire expertise in new areas such as toll roads and bridges, airports, seaports, metro and rail systems.  I remember the foresight and passion with which A Ramakrishna (AR) explained this foray.

Of course, such a pioneering effort, involved certain business risks. AR took efforts to explain the benefits of the toll road concept, which found resistance in the initial period. In quick time, the concept gained acceptance and opened the floodgates for massive expansion of quality road network. With handsome funding by the private sector, road construction recorded growth as never before.

Equally innovative was the lead taken by L&T ECC to form a separate company for the construction of the Bengaluru airport. Its reputation and record were helpful in ensuring participation by reputed global companies. This experience was a big stepping-stone for taking up construction of the much larger airports at Delhi and Mumbai.

Such enterprise extended to form more such companies. The large Dhamra Port in Odisha in partnership with the Tatas is another major venture. K V Rangaswamy who headed the construction division pointed to L&T gaining rich expertise in such diverse fields for engineering and construction, build value and sell its share in such projects to good profit. The company thus derives twin advantages: getting  orders for constructing such large projects and on completion, to sell these at profit.

The L&T Shipbuilding Ltd on which L&T has invested around Rs 4000 crore is another example of a handsome diversification. This project has three components: an engineering unit, shipbuilding cum repair facility and a container port. The present recessionary conditions come in the way of full utilisation of the niche facilities created. With the expected turn around of the economy, the operations would become profitable.

 The construction division had been accounting for around half the revenues of the giant corporation. With the slowdown in the economy affecting the manufacturing sector in the current year, the construction division may account for larger share, of around 75 per cent, of the revenues of the corporation.

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