Ashoka Buildcon Growing from Strength to Strength
Satish Parakh, Managing Director, Ashoka Buildcon is confident of the company’s growth prospects, given the impressive projects in hand and a strong financial standing.
What growth prospects do you see emerging in 2022 and beyond?
Infrastructure sector continues to remain a priority for the government, which is taking efforts to build better highways, airports, roads & railways. The highway sector is seeing unprecedented growth which is stimulated not only by the central government but also by state governments. Our country is building expressways and mega bridges, which shows that we are competing with developed nations in infrastructure development.
We, at Ashoka, are proud to share that we have recently added another prestigious bridge to our project portfolio. It is India’s first 8-lane extra dosed cable-stayed bridge across river Narmada in Gujarat. Such mega infrastructure construction will augment the Indian economy and we will continue to see tremendous potential in the infra construction sector upto 2030.
What is Buildcon’s preferred model for infrastructure development: BOT, HAM, EPC?
Every model has its pros and cons but in HAM & EPC models we see that the success of the project is more feasible. However, considering the recent modifica- tions in HAM MCA, we find HAM and EPC model to be more attractive.
What would you attribute Ashoka Buildcon’s successful implementation of major projects like roads and bridges?
Speed of project execution, upholding of quality, safety, and environment standards, and taking on challenges are part of our company’s DNA. In our 40+ years of experience, we have executed several challenging projects and completed them ahead of schedule.
I also attribute our success to my team of experienced and new enthusiastic members. Our top management comprises of personnel who had joined the company at very junior levels and by virtue of their capabilities, have risen to apex management level. Their on-ground experience helps us provide solutions that are innovative, cost-effective, and reliable.
Also, our integrated business model reduces our dependence on third parties. This helps us establish control over the entire value chain. We also focus on value engineering to come up with innovative solutions.
The road and highway Minister aims to step up road construction to 60 km/day. Do you think that we have enough resources, the expertise, technologies, and the workforce to make this daunting task a reality?
Indeed, there will be some bottlenecks given the multitude and the magnitude of work being initiated; but I believe that solutions will be found, and the desired goals achieved. Advanced technology is giving us the capability of speeding up project execution to a great extent. Alternate resources are being researched and are successfully deployed; for example, recycling of bitumen, use of fly ash from thermal power plants etc, are cost-effective and environmental-friendly measures.
Many new players have entered the infrastructure development space and foreign investments are also rolling in. These are fairly healthy signs for India’s infrastructure sector. No doubt, achieving the Minister’s target is tough, but with aligned efforts it can be achieved.
How is Ashoka Buildcon managing its fund requirement? Are you looking to raise capital from the market for your new projects?
HAM and EPC projects are able to help contractors in dealing with fund requirements for their projects. Presently, the Ministry is operating within these models. As far as Ashoka Buildcon is concerned, our treasury is in a position to handle our current order book well. If need arises, we may look at options for raising funds from the market.
What are the major hurdles that could delay road projects and need to be resolved on a war footing by the Government?
In the past few years, due to unprecedented factors such as over extended monsoons, the Covid-19 pandemic, and escalation of raw material prices as a result of the ongoing Russia-Ukraine war, the ecosystem of the infra sector has become dynamic, and we have to be prepared to face any kind of challenge. The chronic issues of land acquisition and availability of resources are causing delays in some projects.
The rising rate of cement, steel, and bitumen (which many see as cartelization) is hurting businesses and bringing project viability under a shadow. This is slowing down the pace of construction. The pain is universal, as the climbing rates have burnt everyone’s pockets. There are projects that allow relief to contractors for price escalations, but they have slowed down the pace of construction significantly.
However, the Government is being very active in making the ecosystem conducive for speeding up construction across the country and is addressing most of the major issues so that they can be resolved at the earliest. With the recent initiatives taken by the Government, there has been a considerable reduction in the steel and fuel prices.
As a forward-looking company, what scope do you see for technologies like Artificial intelligence, Machine Control, and IoT, which are making inroads in the infrastructure construction and equipment sector. How will they help streamline the day-to-day activities, and curtail project delays, losses, and cost overruns?
We are working closely with manufacturing companies so as to help them understand our requirements. It is said that ‘need is the mother of invention’ and fulfilling our needs is a driving force for innovation. We welcome new technologies and are quick to adopt them. One of the reasons for our quality work and speed of project execution is the willingness to use modern technologies.
What does the FY 2021-22 Order Book of Ashoka Buildcon hold?
Ashoka Buildcon is constructing prestigious projects for state and central governments across India. We have also won some overseas projects. Our current order book is worth ~14,000 crores. We will continue to strengthen our focus on the infrastructure sector which is showing positive signs of growth.