Ashoka Buildcon Gears Up to Grow
Ashoka Buildcon has carved an unparalleled niche in the Roads, Highways, and Bridges segment by completing numerous projects on BoT basis. Kindly retrace the fruitful journey.
Our journey has borne fruits due to the visionary approach of our Chairman Mr. Ashok Katariya and the support of the entire workforce of the company. Mr. Katariya has always challenged the limits and guided the company into unchartered territories. Venturing into BoT projects was itself a dare devil step in 1976. No builder wanted to risk his investment in such projects. Even the fi nancial institutions were not willing to fund BoT based projects.
Therefore, when we took up our fi rst BoT based highway project, the Dhule Bypass, we had to face all sorts of diffi culties. Our determination proved to be stronger than the odds against us and we completed the project in 9 months against an allotted time of 30 months. This set the tone to our road ahead and we kept bagging larger and larger projects. Today, we are one of the largest BoT based developers in the country with a portfolio of 28 BoT projects.
Please mention the notable projects completed by Asoka with respect to the technologies deployed and timely completion.
The list of notable projects is fairly long but the ones that have turned out to be trend changers include:
- The 90 mt bridge across Mandve River completed in record time of 38 days against an allotted time of 12 months. We earned a place in the Limca Book of records for the same. It was an unbelievable achievement and it changed the bidding scenario of the entire bridge construction sector in the country.
- Bhandara to Durg Highway Project on National Highway No.6. – For the first time in National Highway construction, we used pre-fabrication technology for construction of underpasses.
- The most recent example of our technological strength is the Dhankuni Kharagpur Highway Project in West Bengal. The project involved the completion of an incomplete bridge the construction on which was abandoned by the previous construction company and it remained so for about 10 years. The challenges posed by the bridge included the uncertain nature of the river bed, year round strong currents etc.
Pre-cast and pre-stressed systems are getting good response from the infrastructure sector. How do you find their potentials in the country and the role your company is playing in initiating the usage of such innovative solutions?
Using innovative solutions may result in saving life cycle cost of road construction as compared to using conventional materials. The use of latest equipment would also result in saving construction period. Road construction materials and technology has seen lot of improvements world over. Many new materials, techniques and equipment have been used in other countries successfully but the same needs to be tested under Indian conditions, traffic, rainfall, drainage, soil conditions etc. before being put to use in India.
We have our research wing, the Ashoka Highway Research Centre, which is the only one of its kind in India. This wing is dedicated to incorporate better road building techniques which can improve the durability, cost and the environmental impact. This year we have laid emphasis on rain water conservation and have successfully installed storm water capturing techniques on some of our highways. The impact is under observation.
The government target to build 3,000 km roads in the first six months of this fiscal. Do you think this target is achievable considering country’s economic and project delaying conditions?
The target to build 3,000 km in the first six month of the current fiscal seems highly optimistic since not more than 1500 km building of road in six months of last two years are achieved. Though there has been award of more than 6,000 km in FY 2011-12 but many projects did not take off for want of clearances from NHAI and other government authorities. Not just the country’s economy is the factor for getting the finance from the investors, but also many more things as for example, after the award of the project it affected for policy changes risk, clearances from MoEF, railways land handover to NHAI, approval of design and drawings from the railways, approval from mining authorities and courts if there is stay over it, increase in cost of finances for delay in compliance of above obligations by NHAI, increase in cost of project due to abnormal inflation and shortage of key materials of the Project, reluctance of investors for projects in wildlife forests, non-timely decisions of key issues over change of scope and others by NHAI, delay in land acquisition by NHAI, variance in DPR and actual conditions at site, Foreign exchange and interest rate fluctuation etc.
The Planning Commission has raised objections to a proposal to set up an independent regulator for the roads sector, one of the important reforms put forth by finance minister. Can it be a feasible solution to counter various bottlenecks and smoothen project clearances if it comes into existence? What is your take on this?
During the course of any PPP project for highway sector, there are many uncertainties arising out of factors which are beyond the control of both the Concessionaire and the Government. Highway sector has majorly been affected by government failures and not the market failures. The highway sector is faced with issues like financial stress, enhanced construction risk and contract management issues, Clearances etc. These can be addressed more effectively if an independent authority such as a Road Regulator is appointed.
A Highway Regulator must regulate projects in such a way that the need for renegotiation does not arise if there is a case of any. If the need arises at all, the regulator may ensure that the public interest is firmly protected.
While executing infrastructural projects such as bridges and roads, developers face a lot of hurdles such as land acquisition and arm twisting by the local mafia. What level of support do you expect from the state governments and authorities to get rid of such problems?
To address the issue a tripartite agreement between the Road Developer, NHAI and the State Government is signed to avail the Administrative support from the State in such situations. But it is often observed and experienced that even after the signing of the State Support agreement with the state, the Concessionaire is not backed enough by state administration to control the law and order situations at site during land acquisition and operations at Toll plaza.
A word about group’s involvement in the power sector? Does the company have any diversification plan in other infrastructure sectors such as airport, seaport, hospitality etc?
As part of the company’s nature to explore emerging sectors, we ventured into Power Transmission and Distribution Sector in the year 2010. In the very first year, we bagged 6 major projects. Currently, we are completing 12 power T&D projects. Our real achievement is the fact that we have been completing the awarded projects much ahead of schedule and are earning a fairly good reputation as a trusted contractor in the segment.
Currently, we are focusing on the highway and power projects only, yet we are open to investigate possibilities in other infrastructure sectors as well.
What is your company take on the current infrastructure development being witnessed in the country and how can these be put on faster track as per your company’s assessment? How do you look at the business of your company in the current five years plan period?
We find the future of the infrastructure sector pretty motivating. Our order books are healthy and yet there is a lot of untapped potential in the sector. The only way to put development on a fast track is by simplifying the decision making process on issues like land acquisitions, environmental clearances etc. We as developers find it difficult to cope with the communication gap between central, state and local bodies. Once an effective mechanism is successfully developed, things will be much brighter.
Without quoting any numbers, I am confident that the company will continue to grow at a healthy pace. We have proven our project execution skills and our ability to overvcome challenging projects. Our Financial strength has increased significantly with the investment of Rs.800 crores by SBI – MAQUARIE INFRASTRUCTURE FUND and we are determined to make a significant contribution in the highway infrastructure sector.
NBM&CW September 2013
