Hybrid Annuity Model is the answer: Ashoka Buildcon

It would be too early to judge the impact of GST. Whenever there is a change, there is always some amount of discomfort that is generated, which needs to be addressed scientifically and not emotionally.

Ashoka Buildcon Ltd (ABL) is one of the largest highway developers in the country with an impressive portfolio of over 31 projects. What sets Ashoka Buildcon apart from its peers is that its order book comprises a healthy 44 per cent of EPC projects, 29 per cent of BOT projects and the rest in power transmission and distribution. In an interaction with ACE Update, the company’s Managing Director Satish Parakh said that for the next few years HAM is the answer as it promises to be in the interest of the government, developer as well as the road user. Edited excerpts:

Is the road building industry in India back on track?
In my opinion, road sector has been progressing consistently since the past decade. The hurdles that have cropped up from time to time should not be viewed as a complete derailment of efforts to strengthen road network in India. The problems are individual in nature and are being dealt with accordingly. We bear a positive outlook on the road sector as we can see that not only the central government but also the state governments are initiating projects for urban as well as rural connectivity.

What’s changed after GST?
It would be too early to judge the impact of GST. Whenever there is a change, there is always some amount of discomfort that is generated, which needs to be addressed scientifically and not emotionally. I am sure that with the passage of time, the government, as well as the public at large, will be able to optimise this new system of taxation in the interest of the nation.

Does demonetisation continues to haunt road makers?
The impact of demonetisation was temporary and I believe that road developers have been able to recoup from it to a large extent.

Do you still consider PPP a success model for road building?
The Hybrid Annuity Model (HAM), which has been developed as a combination of BOT and EPC models, promises to be in the interest of the government, developer as well as the road user. We feel that for the next few years HAM is the answer.

Brief us on your performance during the past one year.
This year we bagged a considerable number of projects and our order book stands at highest ever. On the construction front too we have been able to outperform our previous revenue numbers. We hope to continue our performance in the forthcoming years as well.

We were able to improve our construction methods and our impact on the environment has reduced appreciably. We continued to work hard on spreading road safety awareness amongst the people at large.

What is the size of your current order book?
We have an order book of over ` 6,000 crore.

What are your long- and short-term objectives?
Ashoka Buildcon shall continue to capitalise on its strengths. It aims to consolidate its position as an integrated EPC player and developer in the road sector. As there is an immense opportunity in the road sector, our short-term objectives, as well as long-term plans, are aligned with the above perspective.

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