Major growth driver will be transmission and road projects.
The Anil Dhirubhai Ambani (ADA) group-promoted Reliance Infrastructure (R-Infra) is on track to commission over Rs 10,000 crore worth of infrastructure projects in the next seven months.
The company, which has so far operationalised two road projects worth Rs 800 crore in Tamil Nadu, plans to commission four road projects, two metro projects in Mumbai and Delhi, and one transmission project in the coming months.
The Rs 14,000-crore R-Infra is executing 14 projects at present worth over Rs 27,000 crore, according to Chief Executive Officer Lalit Jalan. It requires close to Rs 2,800 crore over the next three years as equity across verticals like transmission, roads, metro and airports development.
“R-Infra had Rs 8,000 crore of gross cash, as of September. The company generates a cash flow of over Rs 1,300 crore, which is expected to increase as more assets become operational. Our balance sheet is very under-leveraged and, if required, we can raise adequate funds,” he said.
Major growth drivers for R-Infra — which is expected to grow 20 per cent year on year — will be transmission and road projects. The company, which is currently executing three transmission projects worth Rs 4,300 crore, has identified an opportunity of Rs 58,000 crore in the transmission sector alone over the next three years.
In the road sector, the company sees a bidding opportunity of over Rs 16,000 crore from the Central sector, besides participating in projects worth over Rs 2,500 crore in the state sector, including projects in Haryana, Rajasthan and Maharashtra. The company is currently executing 730 km of road projects in the country worth Rs 7,250 crore.
Recently, R-Infra won a Rs 1,000-crore four-six lane corridor connecting the ports of Mundra and Kandla in Gujarat and the Rs 1,725-crore Pune-Satara Road project from the National Highways Authority of India.
“Even if we bag 10 per cent of road projects from the Central sector, we will have a road project portfolio of over Rs 20,000 crore by 2012,” said Jalan. R-Infra bids for projects with benchmark equity returns of about 20 per cent and most projects in the road sector will be completed within two-three years, he said.
Phase-I of the Mumbai Metro project between Andheri and Ghatkopar will get commissioned before the end of next year — 18 months ahead of schedule. The Delhi Airport Metro Express — a special purpose vehicle created to implement a high-speed metro rail line between the Capital’s international airport and the New Delhi Railway Station, will take off by September 2010. The company also expects to sign a concession agreement soon with the Maharashtra government for the Rs 11,000-crore Mumbai Metro-II.
A consortium of Reliance Infrastructure, Reliance Communications, and Canada’s SNC-Lavalin had won the 32-km Mumbai Metro-II project, which will connect Mumbai suburbs Charkop and Mankhurd. Financial closure for Mumbai Metro-II will happen within six months of awarding the project and construction will be completed within another 42 months.
The company also expects to get a Letter of Intent (LoI) within a month from the Maharashtra State Road Development Corporation (MSRDC) for the Western Freeway Sea Link, said Jalan.
R-Infra has completed works for the first 300 Mw of the Rosa power plant of group company Reliance Power and the project will start generation this month. Work on the 4,000-Mw Sasan ultra mega power project is progressing well and the target is to commission it about three years ahead of schedule, with the first unit by 2012, he said.
