The Railway Budget proposed to extend the Anti-Collision Device (ACD) mechanism, currently being implemented on the Northeast Frontier Railway and Konkan route, to seven more zones. Kernex Microsystems (India) Ltd manufactures the ACD, also known as Raksha Kavach (the patent is with Konkan Railway Corporation). L V Raju, managing director of Kernex, speaks to Probal Basak on the project and other business. Edited excerpts:
The Railway Budget proposed to implement the Anti-Collision Device (ACD) in seven more zones. Are you getting the project and expecting fresh orders?
Definitely. We’ll be supplying 3,000-4,000 ACDs, as I think the work will start immediately in four zones, which includes some works in Northeast Frontier Railway (NFR) and three southern zones — southern, south-central and southwestern — apart from some survey works in other zones.
This year, I think we will make about Rs 200 crore from this. They have allotted Rs 29 crore initially for ACD. But this is preliminary allotment.
As the project progresses, there can be re-allotment, depending on the progress. If we are able to do this year’s work for Rs 200 or 250 crore , they will be allotting that money. There is no problem at all.
Was there any communication recently between you and the railway ministry on this?
We have said work should take off. For some reason, the work is not taking off. I spoke to the railway ministry regarding that. The fact is that this Rs 29 crore has been given only for four to five zones. If you go through the railway budgets in the past, you will find there was small allotment for every project, but as the work progresses, they allot the money.
If the patent is with Konkan Railway, how do you get your share of revenue?
We give the estimated cost to Konkan Railway and then they normally just add 18-20 per cent of the cost that I am giving and give it to the Railway Board. Then we get the payment. It is according to an agreement signed between us.
What are the other areas of your association with Indian Railways?
We provide software technology to Konkan Railways. Further, for the past four years, we are doing operational maintenance of ACD in the NFR and have approximately received Rs 50 crore from that. We are expecting about Rs 15 crore in the next financial year from this.
You are also supplying electronic crossing gates to the Egyptian National Railways. What is the status? Has the recent political turmoil there had any impact?
We got an order for 136 electronic gates from Egyptian National Railways, for which the project cost is Rs 108 crore. Earlier, they placed orders for 81 gates and now they have again issued orders for 55 gates, which we will be supplying in April. Our revenue this year will be around Rs 30 crore from this. We have already supplied about 80 gates. Everything is becoming calm and quiet there. The turmoil has nothing to do with the railways and the work is on.
Are you expecting any other foreign order this year?
Not at the moment. But we are exploring Egypt for further orders and the market in countries like Bangladesh and Thailand. Bangladesh is a big market. Talks for electronic gates on the Dhaka to Chittagong route are on, but nothing has been finalised. We have big infrastructure in Hyderabad. We are in talks with some overseas companies which can outsource their work to us. But, it is yet to fructify.
What are your plans and expected turnover for the next financial year?
Currently, we want the work for implementation of ACD to take off. We are also exploring markets in other countries. In the next one to two years, we expect to have some fresh overseas orders. We expect our turnover in the next financial year to be around Rs 300 crore from our business in India and abroad.