L&T forms new unit for smart cities; expects business to reach $1 billion mark in three four years
The central government plans to spend Rs 1 lakh crore to build smart cities by 2020.
Jun 10, 2015
Source : ET



MUMBAI: Larsen & Toubro, India's largest engineering and construction company, has formed a new unit to cater to smart cities, security solutions and communication projects, expecting the business to grow to $1 billion in three to four years, driven by the government's push in these areas.

The business unit, named Smart World and Communication, will tap the resources of the conglomerate's various verticals and subsidiaries to offer wholesome solutions in a first-of-its-kind initiative, a company official said.

"We have put together a small unit with 65 members which includes people from different verticals within the company and some people who have been especially hired for this," SN Subrahmanyan, board member and senior executive vice president (infrastructure and construction), told ET. "It is a small business unit but with the kind of orders we expect, it can soon become a strategic business unit. It can easily become a $1 billion business in 3-4 years."

L&T has diversified businesses ranging from technology, engineering, construction, manufacturing to financial services. The new unit will focus on three key segments— smart cities, smart communication systems and security solutions. The company has done such projects in bits and pieces and now wants to leverage on the synergy among different businesses to execute turnkey solutions.

"The government is talking about setting up 100 smart cities, even if 20 came up we will hopefully get big orders," Subrahmanyan said. "In a way, we have been doing such projects as gated campuses for IT companies. We would now like to bid for bigger projects such as the one planned for the Bandra-Kurla Complex in Mumbai."

The central government plans to spend Rs 1 lakh crore to build smart cities by 2020. These cities would have affordable housing in a costLars-efficient and environment-friendly physical, social and institutional infrastructure set up for a better quality of living. The Bandra-Kurla Complex is set to become the first smart district with Maharashtra state authorities calling for bids to complete the project by March.

"The government is likely to give more orders for connecting defence setups through optic cable fibre through BSNL. We have bagged some orders in the past and we see more orders for cable laying, data synthesiser and communication coming up. The new business unit will aim for these jobs," said Subrahmanyan.

L&T is also upbeat about installing security systems in cities after having done traffic management projects in Gandhinagar, Ahmedabad and Vadodara. Subrahmanyan said that L&T is open to the idea of acquisitions to fill gaps in its offerings.

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