A. Rama Raju is the managing director of Nagarjuna Construction Company Ltd, one of the largest infrastructure development companies in India Started as a partnership firm in 1978, the Hyderabad-based company went public in 1992.

Over the period, the company has diversified into virtually all sub-sectors of the c infrastructure sector. Currently, NCC has interests in construction, roads, airport, seaport, power, real estate and oil and gas.S. Umamaheshwar catches up with Mr Rama Raju on his future plans for the company.National Highways Authority of India has unveiled an ambitious plan for new roads — how does that affect you? We are pre-qualified for 45 projects worth Rs 50,000 crore. Of them, we are expecting to bag two or three projects in next five to six months. Tenders for projects worth Rs 6,000 crore are expected to come up in February. In next one year, we will ramp up the share of BOT projects share in our overall order book to 25 per cent. Will you be bidding for mega road projects too?Yes, we will. In next two or three months, the government is planning to call tenders for around 10 mega projects, involving 400 to 500 km long road worth Rs 5,000 crore. Though criteria for pre-qualification have not been released, we understand that our company has to tie-up with an international partner to participate in the bidding. Therefore, we are currently discussing four international infrastructure companies and an alliance will be firmed after the criteria were announced. In the last few years, you have been going slow on BOT road projects. Why?In last three to four years, we were very slow on bidding for road projects due to acquisition problem. The share of BOT (build-operate-transfer) projects in our overall order book has come down from 27 per cent to three per cent. In fact, we had not taken up any new road project since 2006. But now that the government has changed the norms for BOT road projects, we are eager take up a few projects. Was land acquisition problem so severe? Has the industry approached the government for a solution? Land acquisition was mainly responsible for the delay in project execution. Unless the land was acquired, the project cannot be started. The delay will lead to cost escalation, making the project unviable. The industry had even approached the Prime Minister seeking a solution for this problem. Now the government has agreed to hand over 80 per cent of land to the contractor on the zero date (before the work has started) itself.Are there any plans to list your BOT arm?Currently, our BOT arm NCC Infra is a 100 per cent subsidiary of NCC Holdings. It has five road projects and three power projects. In future, we are planning to list it also. The Andhra Pradesh government seems to be facing a huge deficit in the upcoming budget. Do you think it will affect the infrastructure companies?The government has already been delaying payments for the last five to six months. All infrastructure companies are facing this problem. We have a payment of Rs 300 crore-Rs 350 crore pending with the government. As a result, we have slowed down our work also. The impact on the company will be limited as only about one tenth of our projects are going on within AP. What about the real estate side of your business? Do you see a recovery in demand/prices? What about affordable housing? The real estate market had already hit the rock bottom. Now the pricing in all cities, except for Hyderabad, have started improving. And it was double whammy for Hyderabad as it was hit by the global slow down and Telangana agitation. But the demand for mid-segment apartments ranging between Rs 25 lakh and Rs 30 lakh is still good. We are offering affordable houses in Kochi, Goa and Ranchi. But in Hyderabad, we kept our plans on hold because of the current uncertainty. You were building a 400 acre township in a JV in Hyderabad. You also had a project going on in Dubai. What’s the update there? The Hyderabad township with Tishmen Speyer was a 400 acre project, but the government has handed over only 100 acres of land. Once the market improves, we will resume activity on this land. In Dubai, we were building two towers — one of which had been sold out before the work started. In the other, we had halted work last year but we are now slowly resuming.