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Expect significant Progress in the road segment

Expect significant Progress in the road segment

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Sanjay Londhe,
Director and CEO,
Ashoka Buildcon.

 

NHAI is very keen about making available the required funding for the development, operation and maintenance of the road projects to cater the target for the daily road construction as 40km which was earlier30km / day, says Sanjay Londhe, Director and CEO, Ashoka Buildcon.

 

How was the Q1 of FY20 for the company in comparison to the last year?

The        Q1 has been relatively consistent with our progress plan, and our focus was on the execution of the projects in hand. We have an outstanding order book to the tune of Rs. 9,000 Crs. and we intend to maintain our tradition of completing our projects ahead of schedule.

There is tremendous excitement at our VADODARA –KIM Expressway, where we are building a first of its kind 8 lane, extra dosed, a cable-stayed bridge across river Narmada. Significant progress has already been achieved on the project.

Our venture into Railways has taken us into a new orbit, and we are executing projects in Punjab and Jharkhand.             Our business development team has geared up to bid for the big-ticket projects that will soon be launched by the government.

As an EPC company, what kind of demand surge you expect with the significant infra allocation from the government?

In the past few years, India has witnessed large scale development w.r.t infrastructure development. Yet there is a lot to be done, and we see several opportunities that will arise out of the Government’s intent to strengthen the Nation’s highways, railways, power, airways, telecommunications etc.

We are strongly positioned in EPC of highways and power division and have now set off to an encouraging start in the railways segment. Our outlook for all these segments is very positive, and we see a good rise in the demand for quality work across the length and breadth of the country.

Allocation of funds for the National Highways Authority of India (NHAI) has been hiked by 21 per cent for FY 2019-20 as the government prepares a blueprint for executing Bharatmala projects in a time-bound manner.

NHAI has the approval to raise Rs 75,000 crore during the current year, and Government support of Rs 36,691 crore has been sanctioned.

 

With recapitalisation initiated by the government, what kind of improvement do you expect in the funding?

NHAI has almost tied up for additional funding through Bond Market and international funding. NHAI is very keen about making available the required funding for the development, operation and maintenance of the road projects to cater the target for the daily road construction as 40km which was earlier30km / day, NHAI is also exploring the possibilities for meeting the fund requirements by monetising the existing road assets.

This financial year, the allocation has been made to the NHAI for significant works under the Bharatmala Pariyojana, entrusted to the organisation for execution. The money will come from the Central Road Infrastructure Fund (CRIF), Permanent Bridges Fee Fund (PBFF), and Monetization of National Highways Fund (MNHF).

The provision is mainly for expenditure on maintaining national highways is financed from Central Road Infrastructure Fund.

The overall allocation for NHAI has seen a rise in the last couple of years; the authority’s IEBR (Internal and Extra Budgetary Resources) has increased.

 

Highlight the three significant challenges faced by the segment?

The biggest challenges continue to be the land acquisition process, the availability of a skilled workforce and clearances from concerned departments.

Although there are other problems also that make the project execution suffer; these include political interferences, vandalism and availability of raw material.

 

Smart cities, ports, airports, metros, highways and rural road development, which segment do you see the maximum demand coming for your company?

Our core business continues to be highway construction and Power, and we are confident that we will bag big-ticket projects in this segment.

Further, we are gaining strength in Power T&D (EPC), Railways and City Gas Distribution. We are already exploring opportunities in Smart Cities and will share development in the same soon.

 

how is your order book looking for the next three years?

We will keep on growing by 20-30% as sufficient suitable opportunities in the sector are in the pipeline.

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