Lalit Jalan, CEO, R-Infra, discusses the company’s aggressive plans in this exclusive with B&E
B&E: How does the company view its role in India’s development vis-à-vis the ongoing oil, energy and power crisis?
LJ: As far as India’s growth is concerned, the biggest hurdle is infrastructure. If India wants to continue growing at 9% it needs the requisite infrastructure in roads, power, ports etc. Earlier, the government controlled infrastructure development. But it failed because it lacked the funds, the technical and marketing expertise and was plagued with corruption. Then it roped in the private sector. So now public-private partnership is becoming a reality in infrastructure. The private partner builds the road without charging anything from the government. They maintain the road, again without charging anything from the government. In return, the government and the private player share the revenue generated from the users of the road. The same also applies to other types of infrastructure projects like airports.
B&E: There is news that R-Infra’s EPC business is being diversified. Please elaborate on that.
LJ: We started the EPC division in 2004. Prior to that it was a very small division known as the Contracts division. It dealt with small projects in the range of Rs.5 million to Rs.10 million. When we came in we focused on large projects, say projects worth Rs.2 billion .The management time required to do a Rs.10 million project is the same as the management time required to do a Rs.1 billion project. Our earlier skills, as you know, were in power generation and power transmission and power distribution. These were the three main businesses that we were focusing on. Then as we built our procurement expertise, our construction expertise, and our engineering expertise we watched our infrastructure team doing late night projects like Metro Rail. And so we decided to bring in that expertise within the company to chart that value-chain also.
B&E: How does the company view its role in India’s development vis-à-vis the ongoing oil, energy and power crisis?
LJ: As far as India’s growth is concerned, the biggest hurdle is infrastructure. If India wants to continue growing at 9% it needs the requisite infrastructure in roads, power, ports etc. Earlier, the government controlled infrastructure development. But it failed because it lacked the funds, the technical and marketing expertise and was plagued with corruption. Then it roped in the private sector. So now public-private partnership is becoming a reality in infrastructure. The private partner builds the road without charging anything from the government. They maintain the road, again without charging anything from the government. In return, the government and the private player share the revenue generated from the users of the road. The same also applies to other types of infrastructure projects like airports.
B&E: There is news that R-Infra’s EPC business is being diversified. Please elaborate on that.
LJ: We started the EPC division in 2004. Prior to that it was a very small division known as the Contracts division. It dealt with small projects in the range of Rs.5 million to Rs.10 million. When we came in we focused on large projects, say projects worth Rs.2 billion .The management time required to do a Rs.10 million project is the same as the management time required to do a Rs.1 billion project. Our earlier skills, as you know, were in power generation and power transmission and power distribution. These were the three main businesses that we were focusing on. Then as we built our procurement expertise, our construction expertise, and our engineering expertise we watched our infrastructure team doing late night projects like Metro Rail. And so we decided to bring in that expertise within the company to chart that value-chain also.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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