We have been growing at more than 25 per cent YoY in the past two years

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We have been growing at more than 25 per cent YoY in the past two years

We have been growing at more than 25 per cent YoY in the past two years

01 Jan 2020 Long Read
- Neeraj Vijay, Director, Chetak Enterprises

Quality, timely deliverables and cost management – these three attributes define the focus of Chetak Enterprises, a leading player engaged in the development of national and state highways across India and Africa. The firm has developed over 1,000 km of highways in India and is currently executing projects worth Rs.60.63 billion. Known for its strong presence in developing highways on a PPP basis, it also has a separate EPC division for the development of roads on EPC mode in India and overseas. Neeraj Vijay, Director, Chetak Enterprises, shares more on the company’s plans, in conversation with SERAPHINA D’SOUZA…

How does the company seek to ensure quality, withtimely deliverables and cost management?
Proper planning, micro-level monitoring and inventory control are the key to timely execution of projects. Cash-flow management is of utmost importance. In this regard, detailed planning before start of work and quarterly, monthly and weekly target framing with optimum utilisation of resources is important. This must match with the fund flow. Further, timely completion of design, drawing work and finalisation of subcontracting agreements play a crucial role in achieving targets. It is not just one or two factors but optimum (not maximum) utilisation of various synergies that helps us achieve our deliverables.

How have high in quality but low in cost materials helped in executing landmark projects?
Quality and cost are two important facets that can never be corelated in absolute terms. Quality and optimum cost, coupled with timely execution, are to be synergised for landmark output.
One of our recently completed projects is the 21.6-km stretch (Dasna-Hapur) of Delhi Meerut Expressway, which includes a 4.68-km, six-lane elevated road. 
In the project, segmental construction was ruled out because of restricted carriageway and ultra busy road. So, we adopted a new construction methodology of casting maximum components offsite, which included fabrication of pile cages, precast pre-tensioned girders and precast post-stressed pier caps. Erection was undertaken by gantries. We used high-grade RCC (M-55) with micro silica and admixtures, resulting in early demoulding and use of steam boilers for gaining early strength. 
The use of high-grade material looks to be a costly affair in absolute terms, but this resulted in considerable saving of time and we could complete the 4.68-km elevated structure in less than 20 months. The extra cost invested turned out to be cheaper as it ensured timely execution in a HAM project. 
Similarly, for Shimla Bypass, we designed a cable-stayed bridge with steel girders to make the structure light, as achieving M-55 was not possible in the cold weather. To conclude, cost alone is not the criterion for prudent construction planning.

Your in-house structural design team works on innovative methodologies...
Yes, the company has a strong team that oversees the designs being prepared under the aegis of expert consultants. The design stage is of utmost importance for any project as the philosophy adopted at this stage ensures timely and cost-effective completion.

Tell us about your equipment bank.
We have a fleet of equipment ranging from 250-300 TPH crushers to hot-mix plants, concrete batching plants, PQC pavers, and all other equipment needed in road construction. Purchase and procurement decision-making for equipment is done at the time of project award and is centralised at the head office. The total requirement of equipment for a project is decided based on the terrain, project size and quantum of work, and time required for completion. There is decentralisation of power for demand assessment and for taking stop gap requirement on rent, but purchase of major machinery is decided at the apex level.

Which execution model do you prefer, and why?
Every model provides ample opportunities to contractors and developers to deliver. Having said that, HAM is the most balanced model as it takes into account the interest of all stakeholders. It gives enough liquidity to the developer and the financial risk is shared by the government. For a company with strong financials and good execution capacity, HAM brings on the table what other models cannot.

At present, what are the painpoints in the construction sector?
The main challenge is the reluctance of financial institutions to invest in projects as they are averse to the idea of HAM and BOT. HAM is the most balanced in terms of risk and finances. It is known that the government cannot fund the entire infrastructure needs of the country and, therefore, private parties must join in to speed up the development. The biggest pain point today is that the failure of one company becomes a benchmark in the eyes of financial institution and makes them apprehensive towards the entire sector or all companies.

How is the company performance? What are your expansion and growth plans going forward?
The company has performed well over the years and we have been growing at over 25 per cent YoY in the past two years. This year, too, we are expecting a similar jump. We are executing projects in Africa as well, but construction of domestic projects have contributed the most to our turnover. As far as further expansion is concerned, we are planning to go at a similar pace in India and explore more opportunities in Africa.

Fact file

Year of establishment: 1991
Top management: HC Jain, Managing Director; Neeraj Vijay, Whole-Time Director.
Segments of operation: Roads, highways and expressways
Centre of operation: Mumbai
No. of employees: Over 2,100
No. of completed projects: 12
No. of ongoing projects: 5
No. of upcoming projects: 5
Turnover: Rs.9.30 billion
Order book: Rs.60.63 billion.

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