DSIJ Mindshare

Riding The Big Waves - J Kumar Infraprojects

What are the civil infrastructure projects currently under implementation by your company?

Projects currently under implementation by our company are as follows. In transportation engineering, roads account for 21 per cent, flyovers account for 25 per cent, and skywalks account for 32 per cent of our work orders. Civil contracts accounts for 13 per cent, irrigation form 8 per cent and piling shares 15 of our work orders.

What is the total value and timeline for implementation of these projects?

Total value of our projects is Rs 1350 crore and the timeline for project completion is around 1 to 2 years.

What are your views on the BOT/BOLT/BOOT schemes under the PPP model? What changes, if any, are needed to be done in these schemes?

The public private participation creates a win-win situation for all the participants. Another important policy that the government can create in the forthcoming budget is to give an indication on incentivisation position, on the issue of sustainability of infrastructure investments. Heavy capital investments made need equally significant and assured financial allocations for maintenance of assets created. With the entire country’s focus being clearly on creation of new assets across Infrastructure sector, it is important to realize that there is no point having large allocations without corresponding allocations for maintaining the asset base created.

This is applicable even for PPP projects where the maintenance expenses have to be incurred by the private operator but he needs assured cash flows from the business (in quite a few cases the assured income comes from budgetary allocations towards annuity payments).

Concession agreements in PPP projects have evolved greatly over the past decade. The focus has shifted from technical details to a stage where the government and developer work together to finalize specifications prior to submission of bids.

What are the roadblocks/bottlenecks in the speedy implementation of roads, highways and other infrastructure projects?

Trespassing and availability of raw material and labour, other than these we don’t face any roadblocks/bottlenecks.[PAGE BREAK]

What policy changes are needed to attract more private investments in the civil infrastructure in the country? What measures would you suggest to bridge the infrastructure deficit in the country?

It is heartening to note that despite the world economic crisis and the consequent difficulties of financing major infrastructure investments, we are likely to achieve the 2012 target of 9 per cent of GDP. It is reported that we are likely to be achieving close to 8.5 per cent in the current year itself and thus not miss the end of Plan target. However, what is extremely important is to sustain the infrastructure investments.

The present Budget, therefore, should aim at doing everything right for sustaining investments into roads, power, ports, urban infrastructure, etc. on a YoY basis. This will not only help economy in the long run, but will also result in addressing the more immediate issues of quicker economic recovery and employment creation. India should clearly look at infrastructure to lead the economy rather than just supporting the economic growth.

There's been a lot of debate about significant policy changes to liberalize the economy across all sectors. Thankfully, the policies in the infrastructure have always been a little ahead of the curve as far as liberalisation is concerned.

Whether we are talking about the FDI policy or the policy of private investment into infrastructure or indeed the several policies of going more open and global in the infrastructure sectors, one can complement the Government on the progressive policies employed.

While one can argue that there is further room for improvement and further liberalisation that is required in some of these policies, I think we have done quite well and can continue to evolve our policies towards more liberalisation in a gradual manner.

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