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CTNL targets Rs 5,000 cr. investment by 2006
By Harish Rao
Consolidated Toll Network India Ltd has an ambitious goal of raising resources for its projects in the road sector to Rs 5,000 crore over the next two years. Promoted by IL&FS in 2001, CTNL has already raised Rs 2,000 crore in the road sector till date. The company has reportedly prequalified in 8-10 road projects and is confident of winning some more.
"Raising funds is not a problem for us because of our parent company's backing and reputation. We usually follow 70:30 debt equity ratio while funding a project," K. Ramchand, President & CEO, CTNL, says. The consortium, formed by CTNL and Punj Lloyd Ltd, was recently awarded a project to develop the road network in the Thiruvananthapuram Capital Region under Thiruvananthapuram City Roads Improvement Project. The project size is estimated at Rs 220 crore and is being funded through debt:equity ratio of 3:1. The project will be implemented in 30 months starting May 2004.
Says K. Ramchand, "This is the first urban road project being undertaken through private sector participation." It is also the sixth road project undertaken by CTNL, the other five being Delhi-Noida, Vadodara-Halol and Ahmedabad-Mehsana road projects, East Coast road project in Tamil Nadu and Belgaum-Maharashtra border stretch on NH-4. The first 4 projects have already been completed while the last one is under implementation. In fact, the initial four projects have achieved cash breakeven, which is an achievement in itself.
The Thiruvananthapuram City Road Development project will be implemented by the Thiruvananthapuram Road Development Company Ltd, which has entered into a concession agreement for a period of 17.5 years. The project will be implemented on BOT Annuity basis and the annuity amount is Rs 17.775 crore, payable semi-annually.
On the future course of the company, Ramchand says, "There is huge potential in operations and maintenance of roads. Though O&M contracts may not be as huge as the construction of roads itself, the potential is yet to be tapped. We are eyeing this segment for our future growth."
CTNL is the only company in India with combined experience in project development, operation and maintenance, toll management and other services relating to infrastructure projects, including roads, highways and expressways. In future, the company plans to use its vast experience gained during the execution of various projects in the past by acting as consultants/advisors for lenders of other road projects. Hitherto, most of the consultants restricted themselves to certifying the progress of the project, but CTNL aims to become lender's engineer by providing the entire gamut of services to lenders.
CTNL targets Rs 5,000 cr. investment by 2006
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