There is a lot of traction in the highway sector in terms of private sector investment and also enthusiasm from both the government and the NHAI. This can also be gauged from the consumption of material and sales of connected equipment. Private sector investment last year (2015-16) was 40 per cent more than it was the previous year (2014-15). If we look at government sector spending, including the NHAI, it was also 40 per cent last year.
Both in terms of project award and construction, in the first quarter (April-June) of the current financial year, we have performed better than the corresponding period, last year. So far, we have bid out 55 projects totalling a length of about 3,000 km and cost of about ~45,000 crore, of which 11 have been awarded, 30 are under evaluation and bids have been invited for another 14.
I would like to say that things are going out in full steam and we shall be able to maintain this momentum because there are projects to do, there are projects which were not done and we need to do them.
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Recently, Sanjay Ubale, CEO and MD, Tata Realty, came and also wrote to us showing the company’s interest. There is also Larsen & Toubro. A lot of companies are interested in hard core BOT toll projects because that is where they say the risk is and they have pockets to match the risks. They have, in fact, said we should have more projects on BOT toll and not so much on EPC or annuity. China Railway Construction made a presentation and apprised us about skill sets.
Is there also a backlog of projects?
by banks themselves like in
the case of power and steel sectors?
It is a case of NHAI driving it since it is okay if a coal mine is not developed, there are no lives being lost. But, here unfinished roads are unsafe.
Are private banks also in the picture? Is it easier to get PSU banks to join the scheme than the private ones?
No it is the private banks that are more flexible unlike PSU banks that have a cautious approach and less flexible, possibly because they have more scrutiny and there is less institutional understanding. ICICI and Yes Bank are involved in discussion. Private banks arrive at decisions faster. But government banks, once they decide they stick by it.
There are cases like that say the Jaipur highway where IDBI is not coming forward because costs have gone up and land acquisition was delayed. We will have to work it out.
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