India's Leading Infrastructure Companies

India's Leading Infrastructure Companies 2015

Mr. Sridhar Cherukuri is the CMD & CEO of Transstroy (India) Limited. An engineer and alumnus of IIM (Bangalore), he is a member of several Financial Institutions, Chambers & Committees. He is a recipient of the IIMPACT 2014 award, which he received through the hands of the Deputy Prime Minister of Singapore in August 2014, at Singapore.

Q. Kindly give us a brief profile of the company.
A. Transstroy (India) Limited is one of the fastest growing engineering and construction companies in India. Our company is headquartered in Hyderabad and has a total manpower base of over 6,000. Initially we started out with irrigation and road sector projects and gradually diversified to hydro power, metro-rails and ports. Some projects that we have successfully executed are Outer Ring Road (ORR) in Hyderabad, NH-26 in the state of Madhya Pradesh construction of Sri Komaram Bhim Irrigation Project (Pedda Vagu Project) near Ada village in Andhra Pradesh, Trichy – Karikudi, Tirunelvelli – Tuticorion in Tamilnadu and Jagityal – Pedappalli Projects in Telanga State. Transstroy has made a foray in BOT projects in 2013-14 and has successfully bagged eight BOT road projects, six from NHAI and two from Madhya Pradesh Government. As on March 31, 2014, the company’s order book value stood at र 246.3 bn.

Q. What are the major challenges faced by the construction sector? According to you, what steps should be taken to overcome these challenges?
A. If we consider only Roads/Highways Sector, major challenges in this sector are:
• The aggressive bidding    • Delay in environment/forest clearances    • Delay in land acquisition
Revision of Qualification criteria: from the year 2010 to 2013 road projects have seen a large number of bidders getting prequalified to bid for projects. Due to this many projects have seen aggressive bidding while many of these projects could not achieve financial closure. Making technical/financial criteria more stringent, focus on financial closure as bid qualification will help authority and Developers to get decent rates.
Premium restructuring: Many road project developers had promised to pay substantial premium to Authority for winning the projects. With the economy slowing down and project timelines getting stretched due to delays in clearances, many projects failed. Premium restructuring for all projects awarded on premium basis will help developers to achieve Financial Closure and reaching development mile stones. Expediting procedure of Land Acquisition and Getting Environmental clearance will also boost-up the confidence of developers.

Q. Do you anticipate any regulatory change in the construction sector in the near future?
A. Most infrastructure projects in India suffer from delays in completion. This is mainly due to inadequate regulatory framework and deficiencies in the approval process. Infrastructure projects require multiple sequential clearances at various levels. Hopefully, this will be taken care of by the government to help the sector to get back on track.

Q. What opportunity do you see for the infrastructure sector in the next five years? How is your company planning to tap those opportunities?
A. Over the next decade, millions of jobs would be generated across different sectors in India, which would create a need for more than 80 million square feet of office space. Recently, the Cabinet has given its approval for private investment in Indian Railways for constructing new plants and lines with enhanced capacity. This reform will help economy to connect railways with industrial plant, mines and port by offering services at lower costs. Recently, the Indian government has approved 9 different road projects worth US$ 2 billion to be implemented by State Governments under Public Private Partnership basis. The Indian Finance Ministry is ready to fund 20% of financial requirement, while the other 20% would come from the Highways Ministry. Parallely Power (Conventional/Non Conventional), Port, Airports, Irrigation, River Linking are other major branches of Infrastructure sector where huge opportunities are seen in the near future. We have already started to spread our wings in these branches also. Our internal infrastructure is being developed to grab the new opportunities.