Today, we have a portfolio of around 26 BOT projects

Satish Parakh, Managing Director, Ashoka Buildcon Ltd Master at the business of civil construction, Ashoka Buildcon Ltd builds and operates roads on a built, operate and transfer (BOT) basis in India. Established in 1976, the company was focused on the engineering and construction of residential, commercial, industrial and institutional buildings. However, over the past decade, it has become focussed on the highway segment, with scores of projects to its credit. Satish Parakh, Managing Director, Ashoka Buildcon Ltd, discusses his company, its activities, planned strategies, initiatives and projects with Shriyal Sethumadhavan. Excerpts…. Journey defined We commenced as a small-time engineering, procurement and construction (EPC) contractor two to three decades ago. We worked on government and institutional buildings then. However, in the second decade, we ventured into the industrial sector. That was a period when the industry was booming and we worked for various nationals and multinationals, for more than over 15 industrial policies as a civil contractor. In 1996-97, the concept of BOT roads was introduced in Maharashtra for the first time and we started bidding for contracts. We were awarded our first BOT project, the Dhule bypass in Maharashtra, in 1997. It was a Rs 6 - crore project. We had to borrow private finances for the completion of the project. However, after the first BOT, our toll receivers got us finances more than the project cost. We realised the benefits and started bidding for BOT projects. We bagged 11 projects in Maharashtra, four in Madhya Pradesh and now one in Chhattisgarh. Today, we have a portfolio of around 26 BOT projects. Core business For our BOT projects, we have a wing that conducts all the research analysis for the traffic. Then, there is a design engineering team that guides the consultants to design a project keeping in mind timeline and quality. In addition to the BOT projects, we are EPC contractors for our own projects and undertake EPC contracts from third parties. Ready-mix concrete (RMC) is another wing where we do captive consumption as well as third-party sales, thereby ensuring maximum utilisation of our assets. We are also involved in operations and maintenance contracts for highways. Over the past decade, we have been extensively concentrating on highway projects. So, these are our four areas of focus. Key philosophies After holding 12 years of experience in highways and with maximum number of projects to our credit, it makes sense to do everything in-house, as quality and time are of the essence. Back then, we did not have specialised researchers who could conduct traffic analysis. Also, the market lacked good consultants to design durable roads. Hence, we had to develop our own strengths, for which these divisions were planned. Today, we believe that one should have complete control on the value chain. BOT projects We created history by constructing the Mandve river bridge, 90 m long with six spans of 15 m each, near Pandharpur in Maharashtra in 38 days. This achievement is in the Limca Book of Records. At present, we are executing a larger project for the National Highway Authority of India (NHAI) on a part of the Nagpur-Raipur highway of NH-6. This is 162 km of four-laning with two projects starting from Wainganga Bridge to Durg Bypass. It's from Bhandara to the Maharashtra border and from the Maharashtra border to the end of Durg Bypass. We have completed the 80 km Bhandara segment ahead of schedule. In 2003, we had also constructed the then longest road of Madhya Pradesh of 203 km. This was another landmark project completed ahead of schedule in a challenging time when traffic was not moving through the state. It was one of the state's first BOT projects. Another milestone for us is under construction. It will be India's first 2×6 lane project with a limited corridor of 5.5 km. This is an ongoing project on NH-3 Pimpamgaon-Nashik-Gonde, to be executed in a JV with L&T. EPC projects We have completed projects like the East Coast Road from Chennai to Pondicherry stretching over 113 km for the Tamil Nadu Road Development Co Ltd (TNRDC) in nine months. Then we completed another project of 156 km in Rajasthan in 12 months. We are now embarking on EPC contracts in power distribution for Maharashtra State Electricity Distribution Co Ltd (MSEDCL), most of which are on schedule. Cutting-edge technology Most of our equipment, including large pavers, crushers and batch mix plants, is imported. Interestingly, we have adopted some of the most innovative technologies on our Bhandara-Maharashtra border project. For the first time, we have used precast underpasses that save time and minimise pollution. Normally, underpasses take about six months; these can be done in three. We have also tied up with a Spanish company, Frasinet (Reinforced Earth India Pvt Ltd), for the Techspan technology and will be using some products from the US for road-building. Safety matters Ashoka Buildcon is the first company to back the integrated management system (IMS) certificate. We are also a QHSE (quality, health, safety and environmental objectives) certified company and focus on adopting state-of-the-art technology, reducing pollution, and complying with all applicable legal and contractual requirements. Going green One of our major achievements socially was our tree plantation campaign. We were certified by the United Nations Environment Programme for planting 2 lakh trees. The buzz We have hit the capital market with an IPO of equity shares of Rs 10 each for cash at a price band fixed between Rs 297 and Rs 324 per equity share aggregating up to Rs 225 crore. CRISIL Equities recently looked at the entire management's attitude towards all the statutory requirements, the entire management of our finances: restructuring, equity-to-debt ratios, control over projects, litigations if any, and so on. After examining all this, we have been rated 4/5, which we consider very creditable. Also, further to the Government of India's Massive Highway Development Programme (MHDP), we are executing five projects, of which we recently completed one, with the remaining four under construction. Of the total lane km we are working on, 1,090 lane km is completed and under operation, while about 2,390 lane km is under construction. Raising the bar Apart from being listed in the Limca Book of Records, we have also achieved awards for the best bridges, in quality and aesthetics. We were awarded for world-class quality for a project executed for Proctor & Gamble in Goa. In the industry, NIMA (Nashik Industries and Manufacturers Association) selected us for the best group. We set another milestone when we received the prestigious CIDC Vishwakarma Award 2010 in the category of Professionally Managed Company. Triumphing over the odds Land acquisition is a huge challenge today. When you upgrade existing highways, you have to deal with many land acquisition issues that arise because of the systems existing in the country — finding the right owner and giving him the right compensation. Coordinating and getting started in India easily spans 18 months. However, Ashoka Buildcon has been able to achieve this in six months' time. And that's our success mantra! Fact sheet: Established year of company: 1993Top management (Promoters): AM Katariya, SD Parakh, Ashish Katariya, Aditya ParakhNo. of employees: 2,412 (As of March 31, 2010) Current order book position: Rs 1,615.37 crore (As on May 31, 2010) Ongoing projects: NH-6 Bhandara Road, NH-6 Durg Bypass, Chhattisgarh -Maharashtra Border Road, Jaora - Nayagaon Road, NH-3 Pimpalgaon - Nashik - Gonde Road, NH-4 Belgaum-Dharwad Road, and NH-6 Sambalpur-Baragarh Road.Centres of operation: Nashik, Maharashtra (Head office); across the states of Maharashtra, Madhya Pradesh, Chhattisgarh, Rajasthan, Karnataka and Orissa. Also undertaken work in Gujarat, Goa and Tamil Nadu, Uttaranchal, the National Capital Territory of Delhi and the union territories of Dadra and Nagar Haveli and Daman and Diu. Turnover: Rs 1,116.25 crore