Railways, water and irrigation to witness maximum focus

Supreme Infrastructure India Limited is one of the leading players in the infrastructure space, focusing on areas such as roads, bridges, power, water, railways, civil construction etc. After building diverse capabilities in the epc space, the company ventured into BOOT space.

Vikram Sharma – MD – Supreme Infrastructure India Limited told Sandeep Menezes that there are two aspects of any project delay – those are design aspect and delay in regulatory approvals.

Vikram Sharma

Vikram Sharma

Excerpts from the interview:

What is Supreme Infra’s future business strategy in India?

We are EPC and BOT asset holding company. At present we have balance sheets of both the business together. However, in future we want to have two independent balance sheets of these two businesses. This we wish by having long term investor or going through trust fund model. We want to get back our equity from holding company to parent company. There is huge potential in coming days and we want to play very important role in implementing various projects coming into railway, irrigation, tunneling and mining.

Which are the main infrastructure segments contributing to Supreme Infra’s current revenue mix? Going forward, do you foresee any major shift in this revenue mix?

Supreme is active in EPC as well as BOT. Our major revenue comes from Roads & Bridges, Buildings & BOT segment.

However Water & Irrigation works will change revenue mix in coming days as it has huge potential in these vertical. Country needs development in these areas. Railway is also getting organized now. This will also improve revenue mix.

Although, the new government has got elected with clear majority – it is will take at least six to 12 months for infrastructure projects to take-off. Comment.

Yes it will take time. Not only government but the way even industry itself, banking and other machineries have behaved in last three years, it will take minimum one to one & half years to take serious reforms and its implementation.

Which infrastructure segments are expected to witness maximum focus in the years ahead?
We feel that railways, water and irrigation will witness maximum focus in the years ahead.

The government wants private companies to contribute half of the $1 trillion investment target over five years to 2017 to expand and improve infrastructure. How realistic is this?
It is very optimistic with present situation. It is difficult and will take time to generate momentum but with due focus it will. Selling and buying foreign equities will also help to develop this. Hence we can say that it is far optimistic then realistic.

RoW (Right of Way) has been a major hurdle for infrastructure segments such as water supply & sewage, highways, power transmission etc. Comment.

Yes, there has been a very serious issue of land acquisition, alignment of all governmental departments for implementation of any project. Procedural backlog due to lack of basic coordination among various department has serious impact on implementation.

Time and cost overruns, however, have become synonymous with infrastructure project execution. Tell us about the main reasons for time and cost overruns? How can the situation be improved?

There are two aspects of any project delay, those are design aspect & delay in regulatory approvals.

Usually there are two consultants, design consultant and consultant while execution. Most of times these are two different consultants Design consultant is never accountable for execution and consultant for execution has own way of functioning in the interest of project which at times shoots up cost. Thus, these two bodies working without alignment created biggest delay of approval and implementation. In total this results in time and cost overruns.

To address this problem, I feel there should be more of lumpsum contract of designing and execution which should be from same consultant or client so that it takes care of other issues.

Availability of trained manpower is an issue faced by all EPC players across India. Tell us about the extent of trained manpower shortage in India’s EPC sector?

There is a huge shortage of manpower in this industry. Qualified professionals at times do not want to work on sites and prefer sitting at offices. Usually labour class like carpenter, mason, plumber, fitter etc. hails from less developed region or state and they have been willing to relocate anywhere where they get job opportunities. But now development is taking place in entire country, and such labour classes have their own preferences. Due to huge infrastructure demand, demand of such manpower has increased but the supply has remained limited creating scarcity, higher payments etc.

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