It reported a 65.10% rise in net profit to Rs 234.73 crore, helped by a dip in expenditur
In a U-turn, highway developer IRB Infrastructure Developers has changed its business strategy.
The Mumbai-based firm will now start bidding for hybrid annuity model (HAM) and toll-operate-transfer (TOT) projects of National Highways Authority of India (NHAI), a departure from focusing on build-operate-transfer projects only.
Earlier this fiscal, IRB had denied any shift in their business strategy and had emphasised that it will limit its highway construction participation only to build-operate-transfer (BOT) projects.
There are around 20-25 road projects that will be awarded by NHAI under HAM this fiscal; one TOT package has already been floated, which is scheduled to be awarded in January, and IRB Infrastructure will eye a share of the upcoming highway projects.
With each passing year, the total number of BOT projects being bid out has been decreasing.
"We won't just look for BOT and TOT projects, but also HAM projects coming up this year. Next fiscal, we are looking ahead to participate in Bharatmala project that the government had recently announced," said Virendra Mhaiskar, chairman and managing director of IRB Infrastructure Developers.
For a concessionaire, a BOT project carries construction as well as traffic risk. However, in case of HAM, there's only construction risk involved, while TOT projects have traffic risks for the operator.
"We are ready to take both the risks, that's why we will bid for HAM and TOT tenders," added Mhaiskar. But, the company will continue to stay away from engineering, procurement and construction (EPC) projects.
For TOT package, the company has initiated talks with global players including companies as well as funds for a tie-up.
Although the road developer claims to be well funded at this juncture to bag TOT projects, it still wants a global tie-up to participate in future rounds of TOT bids.
With road infrastructure sector also bearing the brunt of overall economic slowdown, road companies have been struggling in getting finances. As a result, the government came up with HAM projects as a replacement for BOT, with only a small proportion of BOT projects put up earlier this year and last year. A large number of projects are also being awarded under the EPC model.
The company also announced its second quarter result on Wednesday, reporting a 65.10% rise in net profit to Rs 234.73 crore, helped by a dip in expenditure. During the monsoons, construction activity slows down, which results in a decrease in expenses.
SHIFTING GEARS
- It reported a 65.10% rise in net profit to Rs 234.73 crore, helped by a dip in expenditur
- During monsoons, construction activity slows down, resulting in decrease in expenses
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Highway projects")
)
There are around 20-25 road projects that will be awarded by NHAI under HAM this fiscal; one TOT package has already been floated, which is scheduled to be awarded in January, and IRB Infrastructure will eye a share of the upcoming highway projects.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}