Infrastructure and construction company IVRCL Ltd today said that it has decided to "take a holiday" from bidding for new road projects to focus on EPC business.
The road projects of the National Highways Authority of India and State Highways are beset with problems, leading to delay in clearances and difficulties in securing right of way, according to E. Sudhir Reddy, Chairman and Managing Director, IVRCL.
"Lenders are treading cautiously on road projects and payments too get delayed. Therefore, we decided to stay away from them now to concentrate on EPC business," says Sudhir Reddy.
Interacting with media persons along with R. Balarami Reddy, Executive Director, Finance, S.Ramachandran, Director, IVRCL, Sudhir Reddy said that there is considerable delay in securing clearances and banks and financial institutions have hit sectoral cap on lending to infra firms.
"All these do not augur well for those engaged in PPP infra projects. Therefore, we decided to focus on the EPC business till various issues relating to roads get sorted out," he said.
"As a contractor for execution of projects, we are totally dependent on what the Government does, the local issues and the regulatory environment. Unless issues are resolved, all infra companies will face difficulties," Ramachandran said.
The company has recently completed a merger process of its group company IVRCL Assets & Holdings Ltd.
On Monday, IVRCL shares ended at Rs 38.70, down 1.53 per cent on the BSE.