Isolux tie-up helps C&C to aim higher

Tying up with more experienced partners has helped Bombay Stock Exchange-listed C&C Constructions to turn ambitious and bid for a large share of projects. Its tie-up with Spanish company Isolux Corsan has helped it to bid for infrastructure contracts worth around Rs 11,200 crore in India. Besides, the two partners have together bid for $1 billion worth of projects in Oman, Afghanistan and Uzbekistan.

C&C had tied up with Isolux last year. “The biggest entry barrier for a construction company is its bid capacity which is linked to its previous year’s turnover and technical parameters like how much concreting and earth work one has done. If you want to go up the value chain, you have to tie up with somebody big,” says GS Johar, chairman and managing director, C&C Constructions Ltd.

The company had, in 2001, tied up with Hyderbad-based B Seenaiah. “Now we are almost the same. Our relationship has matured but it does not provide me enough muscle to go up further so we decided to partner Isolux which, is a ¤3.3-billion, unlisted company with business in 23 countries,” said Johar.

Besides building the bid capacity, the partnership has helped the company acquire new skills. “We were a family-driven company. We needed to get our act together to put in systems and processes in place so that we can run the set-up more professionally,” he added.

The company, which has a project shelf of around Rs 4,000 crore at present, sees 60 per cent of its business coming from roads. Currently, it is eyeing Rs 10,000 crore worth of projects in roads and hopes to swell its project portfolio by Rs 3,000 crore by June 2012.

The company is also trying to make an entry into Oman through road projects. “We are bidding for three projects worth $250-400 million each. Internationally, we have worked in Afghanistan for the last six years or so. We have constructed 600 km roads there. We are also constructing the Afghan parliament and the Indian chancery.” The company is looking to spread out its portfolio by doing projects under the Jawaharlal Nehru National Urban Renewal Mission in water sector and power transmission sector.

Its tie-up with Isolux would be through a 40 per cent partnership in special purpose vehicles which will be unincorporated joint venture.