Hindustan Construction Company (HCC) won arbitration award of Rs 217.18 crore for extension of time (EOT) cost claim in Lucknow-Muzaffarpur National Highway Project on Wednesday after 20 momths of hearing.
Speaking about the project, Praveen Sood, CFO at HCC said a major component of the award is the interest component. The construction company's order book, including L1 projects, stands at approx Rs 18,000 crore, he said.
He informed a few EPC contracts of the company in the past were delayed due to land clearance issues adding that there exists outstanding claims of approximately Rs 4,000 crore with various govt authorities.
HCC has secured Rs 217.18 crore as an arbitration award in the Lucknow-Muzaffarpur National Highway Project case.Below is the transcript of Praveen Sood's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Sonia: Can you take us through the news flow?A: We have been doing work for National Highways Authority of India (NHAI) for a long period and few of our engineering, procurement and construction (EPC) contracts were delayed because the land was given to us with much delay and we have lodged claims. These were the projects which we have completed long time back in 2011-12 or 2012-2013 and we have lodged claim on NHAI that they have to compensate us for the additional cost which is basically for overstaying at the site and interest cost and the escalation in the prices of the work. Obviously the NHAI preferred arbitration route in these cases and we have gone through arbitration route and finally after almost 20 months of hearing we have got awarded in our favour for amounting to almost Rs 218 crore. A major component of the award is interest of almost Rs 82 crore.
Latha: You also say in your press release that this is the sixth arbitration decision given in your favour for claims from the NHAI. How many more claims you have? A: We have total pipeline of about Rs 4,000 crore worth of claims on various government authorities which includes NHAI, NHPC, NTPC etc. we have been following these claims vigorously and hopefully this trend will continue over few more quarters. Latha: Could you tell us what is the order book position and how might it rise. Are you in L1 position? What will the order book look six months down the line? A: In the last review when we have discussed about the results we had said good time seems to be coming. As far as order book is concerned, we are L1 in the last quarter for close to Rs 4,700 crore worth of projects which is quite good. Most of the projects are in transport sector and we are quite happy with this and if you add L1 position and the current order book, we are close to about Rs 18,000 crore worth of order booking which is all time high of the last two-three year period. Sonia: How much is the total amount of arbitration awards that you have received in this financial year? A: If you look at the full financial year then close to about Rs 773 crore worth of award which we have received in our favour. It has two components principal amount and the interest amount.
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