Reliance Infrastructure sets great store by road projects. The company is today building eleven road segments with a total length of 968 km, costing Rs 11,700 crore.
“The company is targeting to build road business up to Rs 20,000 crore by the end of this financial year,” says the company’s Web site.
The optimism arises out of the fact that the National Highways Authority of India is coming out with 10 mega highway projects and major six-laning projects.
Out of the 11 road projects, six are in Tamil Nadu.
Two of the eleven projects (Namakkal-Karur, 43 km and Dindugul-Salem, 53 km, both in Tamil Nadu) started earning revenues in 2009. Two more (Salem-Ulundurpet, 136 km, Tamil Nadu, and Gurgaon-Faridabad, 66 km, Haryana) went on stream recently.
Thus, most of the road projects already on hand are seasoning for revenue flows. “Reliance Infrastructure expects three more roads to be revenue operational in the current financial year, and one more next year,” says an analytical report of Edelweiss Securities.
According to information provided in Reliance Infrastructure’s Web site, it is not as though some of the projects have to be completed for them to earn revenue.
Among the projects awarded and which the company is getting ready to execute, three are for six-laning the four-lane roads.
“In these six-laning projects, tolling can be commenced parallel to the commencement of construction from the day financial closure is achieved,” says the company’s Web site.
One of the three is the 60 km Hosur-Krishnagiri project, also in Tamil Nadu. The other two are Delhi-Agra, 180 km, Haryana-Uttar Pradesh, and Pune-Satara, 140 km, Maharashtra.
Reliance Infrastructure, a part of the Anil Dhirubhai Ambani Group, is also into providing engineering, procurement and construction services for power generation, transmission and distribution projects.
It also holds 38 per cent in Reliance Power, which has plans to build 32,000 MW of generation assets. Further, Reliance Infrastructure, through special purpose vehicles, operates the Metros in Delhi and Mumbai.
In the first quarter of the current year, Reliance Infrastructure reported a net profit of Rs 327 crore, which was 24 per cent lower than in the corresponding period of last year (Rs 430 crore).