At present there are equipment renting agencies that also provide customised lease facilities for large projects. EPC player can always avail that opportunity to reduce the capex loading on the project thereby offering a competitive price of the project.

Can you brief us about your current order book size and large projects scheduled to be completed in the next 2-3 years?
JMC Projects undertake engineering, procurement and construction of buildings and factories, highways and viaducts, water supply and irrigation projects in India and abroad. Our current order book is over `10,000 crore. In the next two years, we will be completing a good number of residential, commercial, institutional and township projects, a ship-building factory, a steel plant expansion work, a few flyovers and elevated corridors, some water supply and irrigation projects and a highway project overseas.

What is your perception about the government’s reform policy consistency?
The government has set a fast and steady pace of reforms over the past five years, including demonetisation, RERA, IBC & NCLT, banking, GST, income tax reduction etc. to name a few. The ease of doing business has improved substantially, as evidenced by the steep rise in the World Bank rankings. We can see the determination of the government to sustain the reform process and look forward to further improvement in the business environment. One key challenge to business today is access to capital for growth and we hope the government will do something about it quickly. The efforts to rope in foreign pension funds, equity funds and sovereign wealth funds into infrastructure development is welcome in this context.

Looking at the present scenario for project development and demand for construction equipment, what would you advise as an EPC player? Buy or rent equipment, why do you say so?
The government has declared infrastructure development to the tune of over `100 lakh crore. We are one of the top few potential beneficiaries of this program, considering the work experience, team expertise and financial strength required to successfully undertake these projects. We are bullish about sustainable and profitable growth in this context. We are also committed to develop a strong vendor base and it will be an opportunity for our subcontractors as well, to invest in equipment for executing our projects. Accordingly, we will be buying critical project equipment, subcontract the works entailing generic equipment deployment and rent the equipment that would be required for a specific purpose or for a short period of time. This combination would ensure timely completion of the projects, with minimum acquisition of assets therefor. An EPC player need to keep a proper balance between buying versus rent equipment. At present there are actually spare capacity available with equipment rent or leasing agencies and many a times these agencies are ready to make tailor made requirement for large projects. EPC player can always avail that opportunity to reduce the capex loading on the project thereby offering a competitive price of the project.

How you manage your construction equipment resources?
We have established a Plant & Machinery function in-house with a team of competent staff, responsible for repairs & maintenance, safety compliance, RTO compliance, fuel management, power supply management, hiring of external equipment and fleet operation crew. Equipment management module of SAP, GPS devices, digital fuel management system etc. are utilised to improve availability, preventive maintenance, efficiency and effectiveness of the Plant & Machinery.

It has been widely reported that despite government’s efforts and reform initiatives, the infrastructure sector is grappling with lack of private investments. What is your view on this?
It is true that private investments are lacking in infrastructure sector. But what is even more concerning is the scarcity of capital from the banks now, for meeting the business growth requirements. The Government efforts towards strengthening of the banks is welcome in this context, as the consolidation and enlargement of their capital base, combined with further infusion of capital by the Government in the banks will result in enhanced lending to infrastructure sector. It is extremely important for the government to reduce the cost of capital borrowing for the infrastructure industry. In order to achieve a sustainable growth for the country, infrastructure industry creates significant job and demand which in turn the boost the GDP. Hence it is of paramount importance for the government to take steps towards reducing the interest cost, create a balanced contract agreement where risks are equally shared by the constructors and the stake holders, release of genuine claims of the contractors which are being languished at different levels of government authorities.

What is your view on the outlook for 2022 for the infrastructure sector?
We expect huge off take in the construction of highways & elevated corridors, metro rail & high speed rail projects, water supply & irrigation projects, air ports, nuclear power projects etc. in the coming years. However, the opportunities can be leveraged well only if the liquidity crunch is overcome by the government. Availability of growth capital will determine the extent of growth during this period. In order to push the infrastructure sector development in the country in a sustainable manner, the government need to make a serious effort for ease of doing business for the foreign capital funds and simplify the legal requirements there on.

Shaibal Roy President JMC Projects (India) Ltd. (A Kalpataru Group Enterprise)

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