Expect Rs 1,500 crore to come in from arbitration awards over next 2 months: HCC

This is a detailed process, each of those clients has to follow the standard operating procedure laid down by the NITI Aayog for them. All this takes lot of time, and this has resulted in being able to cutting down only so much.

We have received about Rs 380 crore by way of money against this Cabinet Committee on Economic Affairs (CCEA) order and within next two months, we should be receiving a fairly large amount of almost Rs 1,500 crore.

Q: What is your sense on the order space? What sort of order wins are you looking at and what sectors are driving growth?

A: Infrastructure deal is quite extraordinary. When they talk of a trillion dollars in five years, that is amount at the end of five-seven years look small because we need much more. Yet, there are still issues, which are not resolved for this to move fast enough like the capacity to build that infrastructure because so many construction companies because of all this non-payments etc are almost out of the game and are practically dead. The new ones have to come in, existing ones have to gear up, that is one.

Second is the banking system is completely weighed in by the non-performing assets (NPAs), by lack of being able to have space to give new loans, in resolving the problems, I will not call them bad loans but of overleveraged companies. Therefore the whole idea of creating the build-operate-transfer (BOT) in roads has come to a standstill. These are all old ones. New ones are not possible.

Second is you will find that even the hybrid annuity that was created where the National Highways Authority of India (NHAI) will still participate in a bigger way giving more relief, that too also has not taken off the ground because the banks are very worrying of giving any funds.

So generally what we see here is that these are obstacles that are coming, environmental clearances slightly unstable, regulatory environmental somebody comes in and says stop this, do this. Despite this in the last two years, the spend on infrastructure has started increasing.

Today’s news that there has been an ordinance passed by the government to strengthen the banking because through Reserve Bank of India (RBI) is what they wish to conduct this to be able to take bolder decisions on issues, it augurs well. We won’t be able to read it till the President signs but it shows one thing that government seems to be determined to try and solve this problem.

Q: Are you excited about new developments in the infrastructure space like infrastructure investment etc and will HCC be looking to sell road assets etc through that route?

A: Whatever we have, we will certainly sell. At the moment, we have no interest in being concessionaires because we do not see value in that at the moment because of the obstructions because particularly the construction time risks which may continue which do not come up in EPC contracts etc then those risks are taken by the owner whereas in concessioning, the concessioner takes good part of the risk and I think that is still not de-risked enough.

Q: Any update on Lavasa, are you trying to bring that debt down, any plans to restructure that debt as of now?

A: Those are issues that are now undertaken. The banking system here has been a bit of an obstacle in delaying things but I hope to find some resolutions all around in the next five-six months.