Having executed a slew of projects for the railway electrification projects, KEC now plans to get into infrastructure development for the Railways, which will include laying of cross-country railway tracks.

Amit Mitra

Mumbai Aug. 11 KEC International, part of the Rs 13,500-crore RPG Group, engaged in laying of power transmission lines on EPC basis globally, is broadening its business canvas to get into installation of telecom towers that would be rented out to telecom services providers.

With expertise in construction of power transmission towers, KEC, which is at present executing projects in 40 countries, will be spending Rs 100 crore this fiscal to set up 400 telecom towers in the rural areas where mobile phone is yet to penetrate.

The Government provides 50 per cent subsidy to companies that are willing to set up mobile towers in rural areas.

“We see a significant demand growth in this segment. The Government plans to achieve a tele-density of 32.74 per cent by 2010 from 15.6 per cent now, with improved coverage of rural areas. India will need additional 1.5 lakh towers in the next three years from the current base of 1.20 lakh towers to meet the capacity and coverage requirements,” Mr Ramesh Chandak, KEC’s Managing Director and CEO, told Business Line.

The company is constructing the telecom towers at its three manufacturing units in Jabalpur, Jaipur and Nagpur — its total manufacturing capacity at present is 1.8 lakh tonnes, including 70,000 tonnes of contracted capacity.

Infrastructure development

Having executed a slew of projects for the railway electrification projects, KEC now plans to get into infrastructure development for the Railways, which will include laying of cross-country railway tracks.

“The total outlay for the Railways for the Eleventh Plan period is Rs 2.30 lakh crore. In addition, a dedicated rail freight corridor has been planned, covering about 2,700 km of track with an investment of Rs 22,000 crore. We plan to get into building of railway infrastructure in a big way,” Mr Chandak said.

He said India will continue to see strong growth in the power transmission and distribution sector, the core activity of KEC. Additional power generation capacity of 78,577 MW is being planned under the Eleventh Plan, as compared with 21,180 MW in the Tenth Plan. Besides, the Government has also proposed to set up a National Fund for transmission and distribution reform with a corpus of Rs 1 lakh crore.

Overseas projects

About 70 per cent of the company’s revenues still flow from overseas projects. “We plan to expand our geography by entering the US market with EPC projects this fiscal. We have done some work in the US, but not a full-fledged EPC project,” he said.

KEC is looking to tie up with a US company to bid for EPC projects in power transmission and distribution. “It may be in the form of a joint venture or strategic tie-up. We are set to begin negotiations with a few companies,” Mr Chandak said.

The company had bagged 26 orders in the South Asian markets and 27 orders in international markets such as Afghanistan, Algeria, Kazakhstan, Kenya, Namibia, Saudi Arabia and UAE.

By the end of last fiscal, the company had an order book of about Rs 4,200 crore.

(This article was published in the Business Line print edition dated August 12, 2008)
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