Bullet train: L&T coming on board a good sign, says expert

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The coronavirus pandemic has pummelled the country's infrastructure sector, but news of engineering-to-construction major Larsen & Toubro emerging as the lowest bidder is expected to be a shot in the arm for the beleaguered sector and the company, according to an expert.

"L&T is an extremely commercially conscious and mature bidder. There should not be any apprehension about their quote being lower than other bidders. It is certainly a big boost for L&T's order book as it is the single-largest EPC project in the country," Vinayak Chatterjee, Chairman, Feedback Infra, told Moneycontrol.

The National High Speed Rail Corporation (NHSRCL) on October 19 announced that L&T was the lowest bidder for the design and construction of civil works for 47 percent of the alignment of the Mumbai-Ahmedabad high speed rail line between Mumbai and Ahmedabad.

L&T pipped bids by consortiums led by Tata Projects and Afcons Infrastructure by placing a bid of Rs 24,985 crore.

The section falls in Gujarat, where more than 83 percent of the land has been acquired.

Chatterjee said it is normal for these projects to have three-four bidders.

The project, which was initially slated to be completed by December 2023, has also suffered due to the restrictions put in place to curb the spread of the novel coronavirus.

Land acquisition issues, however, may play spoilsport in the government's efforts to complete the project before the 2024 general elections.

"The land acquisition for the Ahmedabad-Surat stretch has been sorted, but the authorities are facing issues in Maharashtra," said Chatterjee.

He also added that the construction sector has one of the largest multiples in economy, and it is definitely going to have a very positive impact on job creation.

NHSRCL expects the project to generate 90,000 direct and indirect jobs during the construction phase.