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Tribute No Maha Koottani in TN... Paytm karo... Banning booze... Odisha: spectacular win by Naveen Patnaik Kulandai was a giant Russi Mody – a tribute IAS invades NDDB... Online not in line with brick and mortar businesses... Delhi is distant… A proud Madrasi Welcome focus on core competence Scientists urged to take up farmer-oriented research CII projects higher growth… GNS - 100: our first subscriber Where is Rajaji? The rise and rise of KCP This scant respect for Law The balancing act Multi-faceted Venkat Quality education through the PPP mode Recognition to role of NBFCs.... Making ‘my Amaravati’... Kinetic Karnataka ONGC at KG Basin WTO Meet: resolved to meet again Tough task taking states together Intellectual of rare qualities Rs.1600 crore paper board plant of TNPL The ‘Ayyo-yes’ is no more Diamond jubilee of Egmore Samskrt School PPP mode for upgrading Corporation Hospitals …and of a popular trade leader Haul over the coal Land reclamation from sea appears cheaper! SoA @ 80 Readers' Mail CSR and CMI: promise of another Srinivasan Ramanujan... Demise of a media baron... Measuring roof tops in terms of KW/MW The why of tax incentives Medical costs hit the roof... The nuclear option Vibrant Gujarat Welcome changes that testify to Jayalalithaa’s return to health Building loyalty through the stomach Computation of GDP – conundrums continue More tributes to GR Boy, can you beat these? Remembering Indira Sivasailam... Solar, solar everywhere … Nuclear power at the nucleus EEC at the National Media Centre Tatas moving out of urea production... Modi storms Silicon Valley For whom the MIDS bell tolls? R Sridhar steps down as CEO of Shriram Capital Inflation: are we emulating Argentina and Brazil? Bihar – Nitish Kumar adopts the Lalu model Fall in crude prices help in oil sector reform Adharma of opposition politics Insurance companies bleeding, yet no decision on increasing FDI limit! 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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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