The Hindu Business Line : A railway line to the land of opportunities

Chennai, July 7 Ecuador — a tiny country of 2.5 million people on the Pacific coast of northern part of South America, may not have been on the radar screens of Indian businessmen, but looks like things are changing.

Possibly within a month, IRCON International Ltd, will sign up for its first contract in the continent, in Ecuador.

The company will lay a part of the proposed railway line that is designed to connect the capital Quito to the port (and the country’s biggest) city of Guayaquil.

Sources in the know say that the Ecuador’s Government wanted IRCON to construct the entire 400-km railway line, but the Indian public sector construction company said it would first do a part of it and then see how it goes.

IRCON’s contract is worth $50 million (Rs 200 crore). Exim Bank of India has extended a line of credit.

It is learnt that Ecuador had its first railway line in 1908.

IRCON has been asked to complete the construction of the project by June 2008, so that its inauguration could be a part of Ecuador railways’ centenary celebrations.

Significance

To the Rs 1,500-crore IRCON, which has constructed projects in over 20 countries, the Ecuador project may be just another one, but the significance of the project lies in the fact that it would serve to showcase India’s prowess in railway construction.

According to Mr R. Viswanathan, Joint Secretary (Latin America), Ministry of External Affairs, and a former Ambassador of India in Venezuela, there is a huge potential for railway construction in Latin America as railways are not well-developed in the region.

He said that with growing friendship between India and several Latin American countries, Indian companies could look forward to large contracts.

When it happens, IRCON’s contract would be the second largest one won by an Indian company in Ecuador.

Earlier this year, Tata Consultancy Services won a five-year transformation and outsourcing deal worth $140 million with Banco Pichincha, Ecuador’s largest private bank.

ONGC Videsh Ltd, it is learnt, is considering acquisition opportunities in Ecuador. The company last year signed a MoU with PetroEcuador for joint bidding for a one billion barrel oilfield in the country.

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