Larsen & Toubro has missed billing worth Rs 12,000 crore because of the nationwide lockdown, and it will be hard to make up the for the loss in time, Managing Director and CEO SN Subrahmanyan told his employees.

Subrahmanyan expects government spending on infrastructure projects to fall further, and said that some of the projects that have already been announced may be deferred and would affect order inflows.

He said L&T currently had an order backlog of Rs 3. 1 lakh crore, and that some of these projects would go as originally scheduled.

He said the company will resume work at construction sites in a phased manner, by adhering to government guidelines. Project work would be undertaken with higher levels of hygiene, social distancing and with personal protective equipment. However, taking preventive measures may affect the speed and scale of execution, he said. Also, the pace of work would be affected as many in the labour force may want to return to their villages.

Subrahmanyan expects projects in the Middle East to be delayed or deferred because of the crash in crude oil prices.

A sharp fall in export revenue for oil producing nations will hurt their ability to spend on domestic projects.

Next to India, the Middle East is the biggest market for L&T. The company may now have to scale up projects in markets like Africa to make up for delays and deferments in their major markets.

Subramanhyan said the company was providing shelter to staff as well as contract labour at work sites and factories.

The company has already incurred Rs 500-550 crore of expenses on maintaining labour colonies at construction sites, and is expected to incur a cost of Rs 1600-1800 crore cumulatively on safety measures during the lockdown.

He said employees were expected to make sacrifices during these tough times, starting from the top. He said performance rewards and increments for employees would be deferred.

First Published:Apr 24, 2020 12:00 PM IST