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Afcons still hasn’t gone for an IPO?
We did have plans to go for an IPO in 2007 but it was deferred for strategic reasons. Even at this point of time, we have no plans of going for the IPO.

How is Afcons placed financially in the current FY? How healthy is your order book?
We have an order book of around Rs6000 crore with an average execution period of about two years. We expect to have a turnover in excess of Rs2500 crore in the current year and a profit before tax of Rs125 crore.

You have just completed the Vallarpadam Rail project in Kochi (Kerala) well on schedule. It is considered as a milestone project for both Afcons as well as for India. Tell us something about this project.
This is a very important fast track mega infrastructure project for Rail Vikas Nigam Ltd, (RVNL).

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This rail bridge will connect the mainland to the proposed international container trans-shipment terminal (ICTT) on Vallarpadam Island across the picturesque Vembanad Lake in Kerala’s Ernakulum District. Being critical for commissioning the operations of ICTT, this project has been directly monitored closely by the Prime Minister’s Office (PMO) for meeting the ambitious tight time schedule. The total cost of the line is estimated to be about Rs300 crore.
The structure has a clearance of seven meter above water and is made of 134 pillars supported on pile foundation. The depths of piles vary between 45m to 55m. About 50,000 tonnes of cement and 18,000 metric tonnes of steel have gone into the structure. At 4.62 Km, it is India’s longest Railway Bridge and has been completed in a record time of two years and three months.
The speedy construction could primarily be attributed to the use of latest equipment. The highly sophisticated beam launcher equipment which is used for launching the pre-cast superstructure (concrete beams) has been specially designed and imported for this project and is capable of launching 12 spans in a month which equals to 600m length of the bridge. This has been used for the first time in India. Another modern technology used in this bridge is pumping of concrete for a length of 1800m. This became necessary as there is no easy access to most of the bridge foundation locations.
This is definitely a National record in concrete pumping (horizontally) and could even be a globally record. But we will have to confirm it. (Afcons used Schwing Stetter’s BP1800 machine to achieve this feat).
(Pradeep Gaur, RVNL’s Chief Project Manager working on this project, has showered praise on Afcons for this project in a letter. Following are some excerpts: “The professional way in which this bridge has been handled by Afcons Infrastructure Ltd has impressed everyone who has visited the project site. The meticulous planning, massive mobilisation, elaborate preparations, and clockwork precision with which all activities including the girder launching was accomplished would impress even the best worldwide experts in this field.
I doubt if there is any other company in our country engaged in construction industry which could have executed this 4.6km elevated structure better than Afcons Infrastructure Ltd.
RVNL is extremely lucky to have Afcons as their agency to execute this prestigious work. Our total reliance and trust in your organisation for accomplishing this challenging job with extremely tight target has been fully vindicated.”

That fulfils your mission of total satisfaction for the client..
Yes, but we believe in going beyond it. In meeting our customer’s requirement, we are serving the nation as well as creating value for all our stakeholders including suppliers and sub-contractors. That’s in fact our mission statement. Initially, we were a bit apprehensive about this philosophy but the last five years of operation of this philosophy has led to immense benefits. Some of our sub-contractors have stood with us through very difficult conditions.

What is your take on safety?
Safety is must since it involves human life. It is also a key business requirement today. People will not give you jobs if you are not a safe operator. No construction company can afford to ignore safety without facing the consequences. It is important to weave safety in a holistic manner in the process of project execution. It is linked with methods, with technology, with training & development.
For example, we discuss the method of execution with our site engineers and understand what could go wrong in terms of safety. We conduct a hazard and disaster analysis for each of our project. We use this analysis to train our people. Safety is an essential part of the entire project management cycle. I must add that working with several international companies has helped Afcons imbibe the safety culture very early.

Afcons has successfully executed several overseas projects and you also collaborate with many foreign companies. How do Indian infrastructure companies compare with International companies?
Well, in terms of the productivity norms, safety practices, planning etc., global companies fare better than a lot of Indian companies. Of course, I would say that many Indian companies have come a long way in these areas. Ten years from now, India would be on par with any international company. Even an Andhra company will beat the best foreign companies. That’s the growth of Indian infrastructure sector across the board.
As I have mentioned earlier, Afcons has benefited by doing overseas projects and collaboration with foreign companies, as we can get into their league in certain respects.

Which Indian infrastructure firms do you really admire? Why?
I like each company for one particular aspect. For example, I admire Gammon India for commercial management, HCC for entrepreneurial project management, Larsen & Toubro for Technology & systems, Punj Lloyd for global aspirations and of course, Afcons for HR.

Tell us briefly, the advantage that Afcons has by being associated with the Shapoorji Pallonji Group?
This parentage gives us immense push and confidence. Of course, we have great financial backing from the Group but it also gives us an ethical edge. I would rate Shapoorji Pallonji as one of the most ethically strong business groups in the country today.

Where do you see Afcons in the next five years? Will you focus on any particular infrastructure segments? Why?
Afcons had grown during the last five years five times with a CAGR of 47%. We have laid down our road map very clearly. We would be present in all segments of infrastructure but our traditional focus on marine projects will continue. We have also identified hydro as well as Oil & Gas as new growth areas. Geographically, we would continue our overseas presence and would like to have a turnover of minimum 25% from this market. This would particularly come from Africa and oil producing countries in the Middle East.
We want to double our turnover in the next three years and we are confident that we can do it. We would like to maintain our status as a prominent transnational infrastructure company recognised for business innovations, focused on total satisfaction and creating enhanced value for all our stakeholders.

Bonus Interview with the ED
During the exclusive interview with K Subrahmanian, the MD, Construction Week India had the bonus opportunity to speak with S Paramsivan, Afcons’ Executive Director (Finance & Commercial). We present some key inputs from this man who also plays an important role in Afcons.
On training: We have completed about 50,000 man hours of training in the last couple of years for our employees - both on soft skills as well as hard skills. This kind of training is unheard of in this industry. For example, we have tie-up in place with the Steven Covey Institute for our senior management.
On PPP: The PPP model, with the exception of roads, isn’t very favourable in infrastructure segments like ports. Since ECBs have also dried up due to the global situation, the Government needs to rethink on this issue.
On branding: We have woven our branding strategy with our HR policy as we believe our employees are our brand ambassadors. We are focused to ensure that our employees feel the sense of pride, belonging and happiness while being associated with Afcons.
On support from the parent Group: It gives us tremendous strength. Afcon’s technological strength combined with the financial backing of the Shapoorji Pallonji Group gives us an advantage which many construction companies do not enjoy.
On corporate governance: Despite being an unlisted company, 50% of the Afcons board are independent directors who are all eminent personalities. And this is not a statutory requirement. Basically, we have a system in place to ensure proper corporate governance. I would say, ethical operational management is one of our differentiators.

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