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The biggest catalyst in the transformation of the country’s road building sector has been the role of the Indian government. Between 2014-15 and 2018-19, the overall budgetary allocation to the highways sector increased from RS.32,000 crores to RS.71,000 crores. The highlight of this sectoral development has been the announcement of the RS.692,000 crores Bharatmala project which is the largest infrastructure project happening in the country, scheduled for completion in 2022. This has opened up a plethora of opportunities for the road concession companies possessing relatively under-borrowed balance sheets, a knowledgeable employee pool and access to cutting-edge technologies.
At Bharat Road Network Limited, we expect to leverage on the encouraging performance of the company and capitalize on this unprecedented growth opportunity in ways possible.
Last year has been momentous for our company as we reached out to the public market in September to support infrastructure creation under the Public Private Partnership (PPP) model. We are immensely thankful to the investors who reposed their faith in our business model as asset aggregators in BOT platform which has been quite different from the conventional infrastructure development companies.
Following the successful listing of equity shares in the stock exchanges, BRNL continued its focus on improving operational efficiency through enhancing services automation and adopting a prudent project delivery mechanism to expedite execution of the existing under construction asset.
These steps resulted in a healthy growth of the Average Daily Revenue (ADR) across all the operational projects which increased by 22% to RS.163 lakhs in Financial Year 2017-18 from RS.133 lakhs in Financial Year 2016-17. The toll revenue is expected to improve further and stabilize with increased economic activities across the high growth industrial corridors along the project stretch. Furthermore, in the coming year, we are expecting a further spurt in the toll revenues as our Solapur project is nearing completion. This would essentially mean that all our existing assets would be generating cash flows.
Riding high on the demonstrative capabilities across our areas of operations, we are now aiming for the next wave of growth by adopting more focused business growth strategy.
One, the company will seek to buy out assets from financially-stressed companies engaged in building roads across attractive circuits of the country. The Company possesses a strong Balance Sheet as well as a listed status which should enhance its visibility and help in accessing not just the required funding to address these opportunities but also at a cost that would strengthen business viability.
Two, we intend to enrich our knowledge and experience pool through constant strengthening of competencies related to road concessions, tolling and related support functions. We intend to develop and monetize on our project management capability dedicated services to a number of road builders for their projects under implementation. Besides, we are committed to liaise deeper on behalf of our SPVs with NHAI, generating enhanced effectiveness out of the centralized Group activity.
At BRNL, our vision is to constantly strengthen the quality of our portfolio through expansion, consolidation and value accretion.
With relentless focus on expanding our presence across the transportation infrastructure sector in the foreseeable future, we expect to retain our position as India’s premier pure-play road concession company.