Adani group to foray into highway construction sector

The Adani group, which has a presence in the power, coal and maritime sectors, would soon foray into the highway construction sector.

According to sources in the know, the Gautam Adani (pictured)-led group is expected to carve out a subsidiary that would undertake the execution of highway contracts on an EPC (engineering-procurement-construction) basis. It may also bid for upcoming national and state highway contracts. An emailed query sent to a company spokesperson for confirmation, however, went unanswered.

Another group company Adani Capital Private on Thursday announced a Rs 100-crore investment in BSCPL Infrastructure Ltd, a Hyderabad-based EPC and development infrastructure company, focused primarily on the road sector. The funding in BSCPL would be retired out from the proceeds of a BOT (build-operate-transfer) asset sale post completion of the project.

Experts feel the timing of the company to enter the road construction sector is opportune as the infrastructure sector is on a growth path. “If they are planning a foray, it is a great opportunity for them to bid for hybrid-annuity and EPC contracts and even look at picking up equity in some of the highway monetisation projects,” an industry expert who did not wish to be quoted said.

The Cabinet Committee on Economic Affairs on August 3, 2016, had authorised the National Highways Authority of India to monetise 111 publicly-funded projects and a list of 75 operational projects was prepared for potential monetisation using the BOT model. The proceeds from these projects would be utilised for development, and for operations and maintenance of the highways.

At present, the Ahmedabad-based Adani group has presence in the power sector with an electricity generation capacity of 10,440MW. According to information on the firm’s website, more than 75 per cent of the electricity generated at Adani Power’s plants is pre-sold under long-term arrangements.

The company is developing and operating mines in India, Indonesia and Australia, as well as importing coal from across the world. Its thermal coal production stood at 11.75 million tonnes in 2016.

The group, through its company Adani Ports and Special Economic Zone, is present in seven port locations (Dahej, Dhamra, Ennore, Hazira, Murmugao, Visakhapatnam, Tuna-off Tekra, near Kandla) in India, apart from Mundra. The company plans to increase the annual cargo handled capacity from its ports to 200 million tonne by 2020. The port is expected to achieve 100 million tonnes or more of cargo handling capacity in the current financial year.

GROUP FOOTPRINT

• Mining: Developing and operating mines in India, Indonesia and Australia
• Trading: Supplies coal to electricity boards and private companies in India
• Gas distribution: Adani Gas developing City Gas Distribution Networks to supply piped and compressed natural gas
• Renewable energy: 40MW solar power plant in Bitta, Gujarat; 12MW of wind power in Madhya Pradesh.
• Target to install 10,000MW of renewable power capacity by 2022
• Agro: Has three verticals — Adani Wilmar, Adani Agri Logistics and Adani Agri Fresh