Ashoka Buildcon to invest Rs 535 cr in four-lane project

ABL, which is an unlisted company, is the major BOT-operator in infrastructure projects like roads & highways. The company builds a highway projects on BOT-basis and runs it for a specific period before transferring it to a government agency.

ABL has formed a subsidiary- Ashoka Highways (Bhandara) Ltd for construction, operation and maintenance of a 320 km long four-lane project of the NH-6 from the Chhatisgarh/ Maharashtra border to the Wainganga Bridge section in Bhandara district.

Under the terms of the concession agreement, the construction of the project is to be completed by March 2010. The concession agreement provides that NHAI will give a grant of Rs. 10 crore to Ashoka Highways (Bhandara) Ltd during the construction phase of the project.

The estimated cost of setting up this project is Rs. 535 crore and it has been appraised by IDFC. ABL will invest Rs. 535 crore in its subsidiary Ashoka Highways (Bhandara) Ltd for the NH-6 project, sources said.

ABL directly owns a stake of 89% in the equity share capital of Ashoka Highways (Bhandara) Ltd. The remaining 10% interest is held by IDFC and 1 per cent by Promoters to be beneficially held by the Company," sources told Business Standard.

Ashoka Buildcon currently operates in 21 roads (BOT projects) and bridges totalling approximately 2,083 kilometres in lengths in Maharashtra, Madhya Pradesh and Chhattisgarh, the concessions for which were awarded on a BOT basis. Out of the 21 BOT projects, 16 are under operation and five are under construction.

Of the 16 BOT projects under operation, four are operated by the Company; 10 are operated by the subsidiaries of the Company/joint ventures controlled by the Company; one is operated by an associate company in which the Company has a 50% interest; and one is operated by a joint venture in which the Company has a 5% interest.

The 16 BOT projects in operation comprise approximately 908 kms in length.