The Hindu Business Line : Ircon to raise $294 m for Sudan, Mozambique projects

Ircon International plans to raise about $294 million for its projects in Sudan and Mozambique. It also proposes to raise Rs 150 crore from the domestic market for the Dhule-Pimpalgaon road project in Maharashtra.

In Sudan, Ircon has finalised a proposal for executing a $250 million project to construct a 300-km long new rail line. "We are in an advanced stage of discussion to get credit from Exim Bank," said Mr B.S. Kapur, Managing Director, Ircon International, public sector unit specialising in construction projects.

Ircon, along with its sister concern consulting firm RITES, also plans to raise about $44 million for the Mozambique project on Beira line. "From the $152-million project cost, World Bank would be providing $108 million. For the remaining $44 million, we are in talks with Exim Bank and other sources," he said.

Ircon and RITES led joint venture company - Companhia Dos Caminhos De Ferro De Beira, SARL (CCFB) has taken over the Beira Rail Corridor from CFM for rehabilitation of the railway system in Mozambique. They would fix and collect tariff for the services rendered and run it for 25 years. Ircon would take care of rehabilitation, track maintenance and finance of the line, whereas RITES would lend its expertise rolling stock and operations and maintenance.

Moreover, Ircon also plans to access the foreign market as funds are available at competitive rates, informed Mr Kapur. These funds are likely to be used for joint ventures of Ircon in various areas where the PSU may foray such as real estate and hydroelectric power projects, apart from Ircon's road projects.

"So far, we are a debt-free company with a net worth of over Rs 770 crore. We would like to use this strength to access funds," he pointed out adding that Ircon had in the past raised some funds to work on $25 million project Iran, which has been paid back.

Tie-up with IRFC

Additionally, Ircon may also have a tie up with Railways' finance raising unit, Indian Rail Finance Corporation (IRFC), in the long run for raising funds.

The PSU is also likely to bag projects from Brazil and Venezuala. "Our team is preparing a plan to undertake a rehabilitation project for part of Brazilian Railways. It would be a cash contract for us," Mr Kapur said adding that Ircon may be involved in construction of a new line in Venezuela.

In the Rs 565 crore Dhule-Pimpalgaon road project to be executed by Ircon and Soma Tollway Pvt Ltd, Ircon's share is about Rs 240 crore out of which the PSU would raise Rs 150 crore from the market.

Ircon is in talks with various companies in order to bid for several build, operate and transfer (BOT) annuity projects of National Highways Authority of India (NHAI) with a size of Rs 2,600 crore. The individual project size ranges from Rs 270 crore to Rs 700 crore.

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Ircon to raise $294 m for Sudan, Mozambique projects