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Protest masters... TELANGANA at last…BUT Secularism and anti-Hinduism Eternal support for capitalisation of PS banks The Jan Dhan bonanza Maximising the micro pricing … ONGC at KG Basin A professional at the helm of IRDA... Where is Rajaji? The few handicaps... How Air-India loses customs... Insurance companies bleeding, yet no decision on increasing FDI limit! Quality silica from Neyveli Online not in line with brick and mortar businesses... Roaring Ro-Ro facility L&T- the specialty of special purpose vehicles Poor quality of university VCs Readers' Mail London, London Narayan Kudos to NDTV... Paytm karo... When nations steal growth from one another… Demise of a media baron... WTO Meet: resolved to meet again Telangana in top gear… The rise and rise of KCP Silver Years of Madras Musings Dr C Rangarajan returns to Chennai Editor's Says More Shakthi to Das’ elbow When Ratan Tata visited SRM New IT products of Ramco in the pipeline… Why land prices zoom in TN? 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China invests in India The Gulf aviation boom This scant respect for Law Not just in-laws (and outlaws); they’ve renowned academics at the helm! Auto components surge… Parliament in paralysis... Banning booze... A think tank for Chennai Shanti and Sadhana through Music All eyes on Sankara Nethralaya Medical costs hit the roof... EEC at the National Media Centre More Shakti to resource mobilisation... Nuclear power at the nucleus There was flood of milk. Reason: no milk commissioner! Russi Mody – a tribute Pharma – overdose of copying Adharma of opposition politics Tribute – M V Murugappan Why this malaise in medical education? Wise Presidents The Swadeshi Trump Scientists urged to take up farmer-oriented research Modi storms Silicon Valley Colour-Chem’s colourful KRVS Of course, Gujarat is vibrant An informal presentation - analytical, forward locking... B H Kothari - a tribute Welcome GST An enemy’s enemy is a friend
 
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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