Environmental Review Summary
Project Number
10598
Company Name
Indian Infrastructure Equipment Limited
Date ERS Disclosed
Feb 22, 2001
Country
India
Region
South Asia
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Apr 23, 2001
Signed : Aug 20, 2001
Invested : Mar 13, 2002
Sector
Rental Services
Industry
other
Department
Regional Industry - FIG Asia & Pac
Project Description
The project is to establish an infrastructure equipment services company (IIEL) that would provide infrastructure equipment to contractors on a usage basis, thus allowing the contractor to focus on core competencies (construction and project management) while obtaining access to infrastructure equipment without investing capital.
For this purpose, IIEL will inform potential clients of the advantages of renting versus owning/buying equipment and thereby aim to convert part of the current Indian construction equipment market into rentals. IIEL will have access to a large set of projects across various sectors (and regions) and will thus be in a better position to ensure higher utilization of the equipment as compared to an individual contractor. The concept is all the more relevant in the Indian context because of high ownership costs due to high cost of capital and uncertainty about repeat jobs for the contractor.
In order to educate potential clients about the equipment rental concept and to create an awareness in the market about availability of such a solution, IIEL will provide the following services free of charge: (i) provide advice on equipment suitable for a given contractor''s requirements; (ii) providing advice on rental and other options; (iii) bid support — guaranteed access to sophisticated equipment.
In addition, IIEL will provide the following value-added services which will be offered as a package to the contractors along with the equipment; (iv) providing trained operators to run and operate the chosen equipment; (v) providing on-site repairs and maintenance and vi) providing genuine spares and supplies for the equipment. The cost of these services would typically be included in the service charges.
The total project cost is estimated at $46.5 million. IFC is considering an equity and quasi-equity investment of US$10 million. SREI, the project sponsor, is an existing IFC client.
For this purpose, IIEL will inform potential clients of the advantages of renting versus owning/buying equipment and thereby aim to convert part of the current Indian construction equipment market into rentals. IIEL will have access to a large set of projects across various sectors (and regions) and will thus be in a better position to ensure higher utilization of the equipment as compared to an individual contractor. The concept is all the more relevant in the Indian context because of high ownership costs due to high cost of capital and uncertainty about repeat jobs for the contractor.
In order to educate potential clients about the equipment rental concept and to create an awareness in the market about availability of such a solution, IIEL will provide the following services free of charge: (i) provide advice on equipment suitable for a given contractor''s requirements; (ii) providing advice on rental and other options; (iii) bid support — guaranteed access to sophisticated equipment.
In addition, IIEL will provide the following value-added services which will be offered as a package to the contractors along with the equipment; (iv) providing trained operators to run and operate the chosen equipment; (v) providing on-site repairs and maintenance and vi) providing genuine spares and supplies for the equipment. The cost of these services would typically be included in the service charges.
The total project cost is estimated at $46.5 million. IFC is considering an equity and quasi-equity investment of US$10 million. SREI, the project sponsor, is an existing IFC client.
Environmental and Social
Conclusion & Monitoring
Related SPI
