The Hindu Business Line : IRB Infra nearing financial closure of Surat-Dahisar contract

Mumbai, Oct. 21 At a time when liquidity is a major concern for corporates, IRB Infrastructure Developers Ltd, is nearing the financial closure of its Surat-Dahisar six-laning contract for which the company needs Rs 2,800 crore.

“We are close to signing a deal with a consortium of nationalised banks, with Canara Bank as the lead bank, for the debt component of Rs 1,950 crore,” said Mr Virendra D. Mhaiskar, Chairman and Managing Director, IRB Infrastructure.

The company has received an in-principle nod from the lead banker Canara Bank, he said.

As for the balance of about Rs 850 crore, internal accruals and about Rs 450 crore as equity infusion would tide over the requirement.

The company already has Rs 400 crore on its books.

30 Toll Plazas

IRB is probably the largest road toll operator – 802 km — in the country with daily toll revenue of about Rs 1.25 crore spread across 14 projects in various stages.

The company has over 30 toll plazas in operation with cash counters ringing every three seconds.

It has road toll projects on every access to Mumbai such as the 24-km Thane-Biwandi bypass on the Mumbai-Nashik Highway, Mumbai-Pune Expressway and the Patalganga Bridge project on the Mumbai-Goa Highway, besides the recently awarded 240 km Surat-Dahisar stretch on the Mumbai-Delhi corridor.

In addition, IRB is into operation and maintenance of tunnels — 5 km length on the Pune Expressway.

Earlier, IRB paid Rs 504 crore upfront for the Bharuch-Surat six-laning contract on NH 8.

The project is expected to be commissioned by June 2009. For the Pune-Mumbai Expressway, it paid Rs 918 crore in 2004.

The concession period for the expressway is 15 years.

Another order

Maharashtra has awarded the entire road development of Kolhapur city to IRB for a concession period of 30 years. The development work requires Rs 350 crore and IRB gets the toll right on all nine entry points to the city.

In addition, the company has been given a 30,000-sq. metre commercial plot on 99-year lease.

The company intends to establish a star hotel there and is in talks with a major hospitality group.

Township

IRB aims to develop an integrated township on 1,400 acres along the Mumbai-Pune expressway.

It has acquired 1,150 acres so far, and hopes to buy another 250 acres before taking up the task.

The total developable area would be around 30 million sq ft — 12 million commercial and 18 million residential.

Bitumen import

With road projects warranting substantial use of bitumen, IRB benefit from the price difference prevailing between domestic and international prices.

“Domestic prices are around Rs 43,000 a tonne while import we anticipate would be no more than Rs 32,000, given the current global prices,” said Mr Mhaiskar.

While steel prices have come down marginally, the company also expects cement price to dip in six months with a lull in real estate.

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