The Hindu Business Line : Srei to conduct study on Lanka’s mass transportation system

New Prospect
The study on technical, financial aspects of the project may lead to a joint venture.
‘In Sri Lanka, there are huge opportunities arising in the infrastructure sector.’

Our Bureau

Kolkata, Aug. 7

It’s destination Sri Lanka for Srei Infrastructure Finance, courtesy what is set to become a $1.5-2 billion mass rapid transportation system in the island state.

The company has been mandated by the Sri Lankan Government for studying the technical and financial aspects of an ambitious transportation project, which is likely to lead to a joint venture. The land transport authority of Singapore has already joined in.

The size and extent of the project will render it quite unique, said Mr Hemant Kanoria, Vice-Chairman and Managing Director, Srei Infrastructure, adding that a number of entities will ultimately be a part of it.

Opportunities in Lanka

“In Sri Lanka, there are huge opportunities arising in the infrastructure sector,” he told newspersons here. Srei, after completion of the assignment, will seek the Sri Lankan Government’s assistance to carry it forward, he observed.

Singapore’s land transport authority, made up of a group of five companies, is associated with key projects.

Mass rapid transportation systems are quickly gaining significance, especially in populous cities, resulting in increased spending by governments on this front.

Srei, which intends to explore similar opportunities in neighbouring countries, earlier had discussions on a project in Mauritius. No concrete development has taken place on that front yet.

Presence in Russia

Srei already has a presence in Russia, a rapidly-growing market, because of the Russian Government’s greater willingness to expand infrastructure. Srei’s business — in which it has institutional player DEG as a partner — is expected to grow substantially here.

“We are increasingly looking at overseas markets to step up our earnings. In the next two or three years, we intend to secure 30-40 per cent of our profits from fee-based income. Overseas assignments should play a critical role in this,” Mr Kanoria maintained.

Nearer home, Srei is contemplating another round of venture capital mobilisation, which Mr Kanoria felt will be a logical extension of its earlier involvement in this area. It has deployed about $200 million in various infrastructure projects.

“Most Indian infrastructure companies have large order books.

“However, not all players seem to have the capacity to execute these orders efficiently. One of the factors that have led to this situation is the relative lack of manpower. There has been a surge in demand for trained personnel,” he said.

JV with BNP Paribas

The High Court has allowed Srei to go ahead with its proposal to do business in association with BNP Paribas. The two had announced the formation of a joint venture earlier.

“The plan is now on track.

“We will have an EGM later this month in order to get shareholders’ approval,” Mr Kanoria said, adding that institutional investors have been informed of the latest developments as well.

The Srei-BNP Paribas venture, which is set to start with a net worth of about Rs 800 crore, is expected to achieve a business target of over Rs 10,000 crore in the next few years.

More Stories on : New Business | Infrastructure | Overseas Investments

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page