What are your views on ‘Infrastructure as the need of the hour’ to review the economy?
The infra-story in India has been dynamic for the past few years. Infrastructure is an arterial factor in propelling the overall development goals. The government has shown a focused approach by concentrating on infrastructure and development projects. Along with focusing on achieving the goals, the industry is simultaneously addressing environmental concerns. With the plans and progress shown in the past few years, the Indian infrastructure is gradually becoming more globally competitive. Yojanas like Bharatmala, Gatishakti and JJM, if executed timely, will benefit the economy to a greater extent.
What are your views on the need to adapt and remould the infra-activities as per the New Normal?
The second wave of Covid-19 and prolonged monsoon in the country have impacted the execution of certain projects. The execution was lower across the industry due to the unseasonal rains and cyclones, combined with a steep rise in the input price, which limited the ability to ramp up significantly. However, the Ministry of Road Transport & Highways, NHAI, NHIDCL and other different agencies outbid last year's performance. The government's initiative to construct 25,000 kms of National Highway in FY'23 gives visibility to companies like HG Infra for tendering activity going ahead. Further, the government's overall plan to develop around two lakh kilometres of National Highways network by 2025 will help the infra companies to remain confident in the opportunities the sector has to offer. Additionally, the relief provided by the government by reducing excise duty on fuel prices and import duty on key raw materialsand restricting import/export is proving to be advantageous for the industry.
How are you leveraging technology and tech-tools to drive back the momentum?
Digital transformation continues to be a key focus area for the sector. For example, for the smooth flow of traffic, new technologies including vehicle detection, traffic violation control and surveillance, drone-based surveillance of the route, lane control systems, tunnel management systems, and weigh in motion are being implemented in India. The Ministry has been consistently pushing initiatives in the sector to promote the use of sustainable technologies.
HG Infra focuses strongly on having accurate and timely information, which helps in executing and achieving operational excellence. We have undertaken several new technology initiatives during the year and implemented various solutions to enhance our operational efficiency and cost reduction measures. Some of the initiatives taken are sensor-based technology for fuel dispensing and a fuel level management system. These technologies provide us with real-time information on consumption and help put effective control on fuel costs. The other active initiatives improve equipment control, vehicle management and offer multifunctional applications to automate manual processes.
How is the government overcoming the challenges of funding road projects?
Over the past few years, NHAI has been introducing innovative ways to fund projects. Asset monetization via ToT, InvIT and HAM are many of the few ways opted by the government body. NHAI has proactively taken adequate measures for the cash flow during the covid period for the road sector, which has helped in the constant execution of the projects. This has also helped the entire sector in utilizing their working capital and other funding requirements prudently. The NHAI has taken immediate steps like permitting the change of ownership from existing two years to one year after Commercial Operation Date, reduction in bank guarantee margin and monthly payments for all running bills presented to them.
What are your plan of action for revival and way ahead?
Our strategy of selective bidding and diversification plans and constant efforts on operational efficiencies, coupled with multiple digital initiatives, helped us to mitigate the pressure faced in the past year and continue maintaining our margin profile. We remain confident of the future inflow given the robust bid pipeline and the back of the strong tailwinds with the government's focus on infrastructure spending. We have time and again demonstrated our strong execution capabilities. Our experience and demonstration on the execution front, combined with the ability to operate and complete projects on time, give us the confidence to maintain growth while going ahead.