IL&FS Transportation expects to hit order target

Infrastructure builder IL&FS Transportation Networks  expects to achieve its order book target for the fiscal year ending March, even though project wins have been below expectations, Managing Director K Ramchand said.

The company hopes to win up to 400 km (250 miles) of road projects by end-March, having already won two projects totalling 198 km this year in the eastern Indian state of Jharkhand, he said. Ramchand said the company had won contracts worth about Rs 6 billion (about USD 113 million) so far this year. "But with three more months to go, we are hoping for further wins," he said in an interview. The National Highways Authority of India is expected to award at least 2,500 km of road projects between now and March, he said. India, which built about 1,800 km of roads in 2010/11, will award a record 7,300 km of road-building contracts worth USD 12 billion this fiscal year, an NHAI official told Reuters in June. "I think since the second quarter of 2011, there has been significant progess in awarding of projects," Ramchand said. "Even if we get about 300-400 km of projects, we would be able to meet our target," he said, although he added that IL&FS Transportation was not the lowest bidder in any NHAI projects as of now. Falling order book IL&FS Transportation expects its unfinished orders to fall to Rs 70-75 billion by the end of March if it does not win any new work. As of September 30, orders stood at Rs 90 billion. The company has 11 projects under way, apart from contracts for building part of the Gurgaon Metro rail project, near New Delhi, and border checkposts in Madhya Pradesh. Gross debt will rise to between Rs 80 billion and Rs 85 billion by the fiscal year-end, depending on the pace of construction, Ramchand said. On September 30, the company had debt of Rs 69 billion. India budgeted about USD 500 billion for roads, railways, power plants, telecoms, oil pipelines and other infrastructure in the five years to the end of March 2012. It plans to double spending on infrastructure to USD 1 trillion in its next five-year plan, which starts in April. Still, IL&FS Transportation is not depending on Indian projects alone. It is also bidding for projects in the Middle East, Africa and central Asia. Last month, it paid USD 160 million for a 49% stake in China's YuHe Expressway Co Ltd. IL&FS Transportation shares closed up 5.89% at Rs 159. The overall market was down 0.36%.