Infra round up: The good, the bad and the ugly

UR Associates has come out with its report on infra space.

The Planning Commission of India came out of its review on targets set by the Government for the 1QFY13 in various infrastructure segments such as power, roads, ports, railways and airports. The review as on 10 July, 2012 shows the underachievement of targets in most of the sectors. The only sector which performed well is power where the achievement is ahead than the target determined. The capacity addition in the power sector is 5,266 MW till 10 July 2012 as against the target of 3,807 MW set for the quarter. The share of thermal and hydro sectors in the addition was 4,965 MW and 301 MW, respectively, against the targets of 3,680 MW and 127 MW. About 3,699 ckm was added in power transmission lines in the quarter against the target of 4,551 ckm.

In roads, only 100 Km of contracts was awarded under NHDP against the target of 1,785 Km with 649.6 Km of construction work completed as against the target of 774 Km in the period. Not a single project was awarded in ports against the target to award of 42 port projects. In civil aviation, against the target of Rs 10.5 bn, the investment in public-private partnership (PPP) airports during the first three months of FY13 was only Rs 7.97 bn. In railway metropolitan projects, only Rs 810 mn was spent till May 2012 against the target of Rs 4.73 bn, due to delays in land acquisition and clearances from civil authorities. Around 74% of the land required for the DFC Project had been acquired and the rest would be acquired by the end of the 2nd quarter.

GMR Infrastructure set for Canada coal mining venture exit- In another move to shed its international assets, GMR Infrastructure has initiated a process to exit its 55% stake in Canada based publicly held Homeland Energy Group, for $100 mn. GMR had acquired majority stake in Homeland Energy during 2008. The company has coal reserves of 350 mn tonnes in South Africa and is a significant shareholder in Homeland Uranium Inc, a Canadian exploration and development entity for the mineral, focused on projects in Niger and America. GMR Infra had taken majority stake in this company for around $50 mn to secure fuel supplies for its power projects in India. GMR has 830 MW of operational assets and is on track to operationalise 1,500 MW during 2012-13. However, it has been facing issues over lack of infrastructure at a port near the mines, which is not conducive for exports at this point.

BHEL plans to invest Rs 10 bn for modernization- Engineering major BHEL plans to undertake capital expenditure of Rs 10 bn this year for internal modernization and expansion of different sectors under its ambit, the company CMD B Prasada Rao said. Besides this, Rs 4 bn has been set aside for a JV investment for setting up a steel plant, of which 30-40% off-take will be for the company's own consumption, he told reporters here last night. With Government of India's target of installing eight lakh MW by 2032, which is four times the current capacity and with most of this is likely to be in PSUs, BHEL was confident of sustained growth in the coming years, he said. With many projects in the pipeline, BHEL was optimistic of adding 7,000-8,000 MW order before end of this fiscal. In the first quarter of the year, BHEL secured order for providing equipments for generation of 3,000 MW. "The remaining three quarters also seem positive," he said. Overseas orders from the Middle East, Africa and SAARC nations also had no bottlenecks, he added.

May raise loan for Mumbai airport: GVK Power & Infrastructure-GVK Power may raise loan from banks to meet costs at the Mumbai International Airport Ltd (MIAL) if the airport regulator does not allow it to pass on additional costs to passengers by December 2012. The company has been demanding the Airports Economic Regulatory Authority (AERA) to be allowed to charge additional airport development fee and aero-charges to complete the airport modernization. GVK took up modernization and expansion of the airport with an initial outlay of Rs 98 bn, but the costs escalated to Rs 124 bn.

Asset monetization on cards; order book is healthy: NCC-
Commenting on the Q1FY13 results of NCC Ltd, Y D Murthy, EVP-Finance said that the company is at the bottom of the business cycle and from this year onwards, growth can be achieved at 10-15% year-after-year. He said that to reduce the debt burden, the company has plans to monetize some of its real estate and BOT projects, but that depends on market conditions. He said that NCC has a debt of ~Rs 25 bn at present which it wants to bring down to sub Rs 20 bn by end FY13. NCC has received orders worth Rs 20 bn in Q1FY13 and the current unexecuted orders stands at Rs 20.5 bn.

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