Nagarjuna Cons says safe in Dubai crisis

Infrastructure major Nagarjuna Construction Company (NCC) Ltd finds itself in a safe zone in Dubai despite the concerns over the impending crisis in the economy there.

Nagarjuna has been working on a couple of infrastructure projects in Dubai including a residential project. However, according to the company, there would be no impact of any such crisis owing to its dealing with the government there.

“We don’t foresee any payment risk since we are dealing with the government there,” a company official said. The Dubai residential project - Harmony - is a 10-floor tower with 440 apartments. The company has already sold the space there and has received about 15-20% of the cost from the prospective occupants.

However, the company was running the risk of funding the project and is already engaged in talks with institutions to raise about Rs 100 crore to take the project forward in order to get the next milestone payment from the customers.

However, considering the slowdown in the realty market in Dubai, the company is going slow on the second residential tower.  The company is also executing a water pipeline project in Dubai worth about Rs 100 crore. However, this being a government project, the company does not anticipate any payment problem.

Nagarjuna has also bagged a coastal highway project in Oman and the project cost is estimated to be about Rs 1,800 crore. However, this project is still in its initial stages.