HCC says government agencies owe it Rs 5,000 crore

Hindustan Construction Company (HCC) today said various Government agencies owe nearly Rs 5,000 crore to the debt-laden realty firm and blamed delay in environmental clearances for launching new infra projects.

"Delay in prompt payment for infrastructure projects is plaguing the infrastructure and construction industry," HCC Chairman and Managing Director Ajit Gulabchand said at the company's 87th annual general meeting here.

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"All construction contracts involve changes of scope, variations, and delays due to one reason or the other. All over the world, when these instances occur, contractors put in place claims to recover the extra costs so incurred," he said.

"The global practice is that such claims are settled on the recommendation of officially appointed panels and on account of the project. These are still being discussed in India, years after the Mumbai's Sealink (built by HCC) became operational."

Unpaid dues to contractors on account of National Highways were estimated to be at almost Rs 22,000 crore, Gulabchand told the shareholders.

"HCC alone is to get some Rs 2,500 crore across its various (Government-awarded) highway construction projects. For the hydro-electric sector, the total outstanding is around Rs 7,500 crore, of which dues to the company are around Rs 2,500 crore," he said.

Gulabchand maintained environmental clearances have been a major hurdle to new infra projects. "Also, a series of high profile scams has had an adverse effect on decision- making at the Government level."

There are no easy solutions to these issues, except to say that these all stem from bad governance, he stated.

During FY13, HCC opted for a formal method of loan restructuring with a consortium of 27 banks, and referred its Rs 3,300 crore of debt along with working capital fund based and non-fund based limits of Rs 6,800 crore to the corporate debt restructuring cell.

The company posted a consolidated turnover of Rs 8,510 crore during the last fiscal year, while consolidated loss was Rs 482.5 crore. HCC's orderbook stood at Rs 14,935 crore.