"With Pan India presence, Ashoka Buildcon's predominant focus would be on highways, bridges, power transmission, and distribution segments. Today, we have a portfolio of 21 BoT based highway and bridge projects which is one of the highest in terms of number of BoT projects by a single enterprise. In power sector, we have already bagged over Rs.1156 crores worth of Power T&D projects in Maharashtra and will bid for more such projects in future," says Mr. Satish Parakh, Managing Director, Ashoka Buildcon Limited, in his interview with S.K.Khanna.
The progress of Ashoka Buildcon over the years has been remarkable, starting from real estate business and graduating to other construction business to play a significant role in the country infrastructure development. How has this journey been helpful in its milestone organizational achievements paving the way for its progress and growth in the industry as we see today?
Ashoka has been known for capitalizing on early mover advantage in emerging sectors. Even in the year 1986, the company was fast to recognize the growth potentials in industrial and institutional construction and was an early entrant into this sector. The result of this move was that Ashoka bagged construction projects from many Multinational Companies and highly reputed Institutions across India.
Similarly, in 1996, Ashoka Buildcon was quite fast to identify the growth in Infrastructure development and became one of the first to venture into BoT based projects. Today, we have a portfolio of 21 BoT based highways and bridge projects which is one of the highest in terms of number of BoT projects by a single enterprise. We are also amongst the very few who have experienced the complete life cycle of a BoT project as 3 of our projects have already completed their concession period and have been handed over to the government.
What are Ashoka Buildcon's important business areas and its various divisions spread heading their respective business agenda?
We are an Infrastructure developer with our focus predominantly on the Highways and Bridges development sector. We have a pan India presence and are executing projects for state governments as well as National Highways. Thirteen of our projects are operational while five are under-construction. It should be appreciated that recently we bagged our largest BoT project that is the Six laning of a highway between Dhankuni and Kharagpur. The estimated project cost of this project is over Rs.2300 crores and it is our 9th project on National Highway 6.
The highways development sector shall continue to be our priority in the foreseeable future, yet we are also strengthening our presence in the Power Transmission and Distribution sector. We have already bagged over Rs.1156 crores worth of Power T&D projects in the state of Maharashtra. We shall bid for more such projects in future.
In the roads and highways sector, your company has successfully executed a number of toll-based BoT projects thereby establishing new benchmarks. Can these projects which have been completed so far be quantified in numbers and km road length including the ongoing ones?
We have a portfolio of 21 BOT highway projects. Three of our projects have witnessed their complete cycle and have been handed back to the government. Thirteen projects are in operation and five are under-construction. In terms of lane kilometers, we have our constructed and ongoing projects stretch upto 4350 lane kilometers under BoT.
In a recent policy change in awarding contracts priority to the road project, toll-based BoT option has been considered beneficial in various aspects. How does this development augur well for the future business of the company which today specializes in this segment?
This policy is definitely very encouraging for companies like ours, yet the challenge lies in executing these projects. The road projects face many difficulties such as land acquisitions, forest clearances, lack of coordination between local, state and central authorities etc. Efforts should be made to reduce time delays caused because of the above reasons.
Your company is an important player in RMC with its own plants. How many RMC plants the company owns and what are their capacities? Do these plants exclusively cater to the construction requirement of the company or RMC products are available for marketing?
Our RMC wing is one of the many strengths that help us to execute projects faster ensuring full control over quality. Our plants are basically for our own captive consumption. There is a great demand for our Ready Mix Concrete in cities like Mumbai, Nashik and Indore where we provide concrete to many of the renowned builders and contractors. We have five commercial RMC plants in these cities with an installed capacity of 390 cubic meter/hour.
RMC has manifold benefits but despite this, RMC business in India and its use has not reached the level as we see in abroad. What are the reasons, the problems of RMC players and how these can be resolved?
The benefits of RMC is undeniable. All our projects are completed by using ready mix concrete produced in our own RMC plants. This helps us to execute projects at a much faster pace and we are able to eliminate the loss of quality that occurs due to improper mixing, water content etc.
Lack of awareness is the basic reason for the slow growth of RMC business. Its only a question of time before RMC becomes an integral part of small scale constructions. All major construction projects are already using it and gradually it will also percolate to other levels.
What is your company's involvement in the power sector including in power transmission and distribution network. How many important projects are in hand and projects in the offing?
Ashoka ventured into the power sector with a vision to make a positive contribution to the field of power supply for the masses. Our aim is to establish a highly efficient transmission and distribution network that will supply electricity to remote locations with minimal energy losses. Ashoka is already one of the prominent power transmission & distribution companies in Maharashtra and is executing orders worth Rs.1,156 crores under the Mahvitran Infra Plan and Feeder Separation projects.
Our projects include, Construction of New Substations 78 Numbers, Capacity enhancement of Existing Substations 135 Numbers, Construction of 33 KV overhead Lines 1000 Kilometers, Construction of 22 KV overhead lines 870 Kilometers, Construction of 11 KV overhead Lines, 8570 Kilometers, Construction of New Distribution Transformers 9441 Numbers.
A brief on your business in Toll Collection. How do you propose to modernize this with sophisticated IT inputs to get best business results in this fast growing business?
One of our key strengths is our fully integrated business model. We have our inhouse specialists for all the core departments involved in BOT projects including traffic survey, tender submission, design, EPC, operation and maintenance and toll collection.
Infact we have our own IT department that designs toll collection software specifically to suit Indian road commuters. This department makes continual improvements in the software as well as the hardware to ensure that they stay abreast with international standards.
The Group has also established its credential and specialization in undertaking EPC projects.
Our EPC wing executes construction work for our BOT projects as well as for third parties. We have executed many prestigious road projects on EPC basis.
Our work is recognized for high quality and speed of construction. For Example, the East Coast Road project between Chennai to Pondicherry was appreciated by the government as a model road. The 154 kilometers road constructed for RIDCOR in Rajasthan was completed in 3 months ahead of schedule and the client awarded us with a bonus of Rs.1.90 crores for early completion. Dumas road constructed by us in Surat has been one of our landmark projects in Urban Infrastructure development.
Your company has important international certifications like ISO 9001, OHSAS etc. How have these enabled the company to place effective quality, safety and environment system and upgrading expertise in relation to design, development, construction and related infrastructure services matching international standards?
Our association with Quality standards has been something that makes us proud. We were amongst the first construction companies in 1998 to be certified for ISO standards. This was an achievement because during those days the construction sector was one of the most disorganized one in the country and it was considered very difficult to establish standards. Yet we were determined to set standard for operating procedures in all our operations and we were able to achieve the same.
Since then it has been our priority to respect and adopt the latest and relevant standards applicable to our line of business. The result of which is that we became the first Indian Infrastructure company to be certified for IMS which includes Quality Standard ISO 9001:2000, Environment Standard ISO 14001:2004 and Safety standard OHSAS 18001: 2007.
We are also the first Indian Infrastructure Compnay to receive GHG 14064 certification which certifies that we have a comprehensive Green House Gases emission Monitoring System.
We have designing and implementing systems that match the EHS (Environment, Health and Safety) guideline laid down by World Bank Group.
Based on your sound track record, how do you see the potentials in growth of various business areas the company is pursuing in the next 3-4 years? What about the total order book of the company?
Our order book is worth over Rs.4600 crores and are bidding for large scale projects. As I have mentioned before, we would continue to focus on highway development and power distribution projects. Both these sectors have tremendous growth potentials and we are sure that the government will also continue to focus on developments and progress in Infrastructure Development sector.