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Bajaj Hind forays into infrastructure

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Ajay Modi New Delhi
Bids for Ganga Expressway with DS Construction, Apollo Group.
 
Bajaj Hindusthan (BHL), the country's largest sugar producer, is likely to foray into the infrastructure sector in a bid to diversify and secure the company from the cyclical nature of the sugar business.
 
The company is also toying with the idea of developing real estate projects.
 
The Shishir Bajaj-owned company has recently bid for two phases of the Uttar Pradesh government's 1,047-km Ganga Expressway Project in association with DS Construction and the Apollo Group. The consortium has been shortlisted for the two phases and the financial bid is scheduled to open on January 13.
 
The two phases are Greater Noida to Fatehgarh, including the Farrukhabad Link (253 km), involving an investment of Rs 7,631 crore, and Fatehgarh to Dalmau (Rae Bareli), including the Lucknow link (305 km), at an investment of Rs 8,012 crore.
 
On December 27, BHL informed the Bombay Stock Exchange that its board had approved the company's participation in the project.
 
The company has also diversified into the production of particle-board and medium-density fibre-board from bagasse, a byproduct of sugar. It has also ventured into value-added products such as ethanol and power.
 
Sugar, the company's main business, is highly cyclical in nature and the company has posted huge losses in the last few quarters due to a downturn in the sugar sector.
 
The country saw a record sugar production of 28.4 million tonnes last year, which is expected to be higher this year. Consequently, sugar prices have crashed by 30-35 per cent in the last one year and are expected to remain under pressure in the near future.
 
"We are the technical partner, while BHL and Apollo are the financial partners. The consortium's activity is currently limited to this project," said an official at DS Construction.
 
The expressway, the biggest road project by a state government in recent times, has attracted big companies such as GMR, Jaiprakash Associates, Punj Lloyd and L&T, because it includes land development and revenue-raising rights through tolls over a 35-year concession period.
 
The state government, which will oversee the administration of the project, plans to start construction of the expressway from April 2008.

 
 

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First Published: Jan 08 2008 | 12:00 AM IST

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