IVRCL is planning to go back to its roots
Picture for representational purpose
Hyderabad: After its aggressive expansion into the construction of highways, and building a huge land bank, Hyderabad-based infra firm IVRCL is planning to go back to its roots cash contracts in water-related construction projects.
“We have, of late, figured out that owning BOT assets is not our strengths. So we have decided to exit from all our BOT projects and focus more on EPC contracts in water,” said Mr E. Sudhir Reddy, the chairman of IVRCL, on Monday.
India is expected to invest massively in water-related projects such as irrigation for rural areas and water supply pipelines for urban India and IVRCL is planning to tap into this opportunity through cash contracts.
Currently, the water projects constitute 58 per cent of the company’s Rs 18,000 crore order book. All most all infrastructure companies, who opted for BOT projects, have been in trouble due to higher interest rates, price escalation and higher overheads.
Projects awarded under Build-Operate-Transfer (BOT) mode require the builder to raise loans to build the asset. Going forward, Mr Sudhir Reddy said IVRCL would sell its BOT projects seven roads and one desalination plant to retire around Rs 3,500 to Rs 4,000 crore debt and also bring back equity of around Rs 1,500 crore into the company.
After the sale of all BOT projects, the chairman said the company could consideroffloading its land bank at an opportune time. “Currently, we have 1,700 acres land bank, which is worth around Rs 3,000 crore,” he explained.
( Source : dc correspondent )
Next Story
