With its flagship Dighi Port project fast nearing completion, Balaji Infra Projects Ltd is now focussing on developing infra facilities in its vicinity, says the Company’s CMD, Vijay Kalantri
Please tell us something about the origin of your company?
Balaji Infra Projects Ltd was formed in 1984 purely as an investment company. We were into processes like bill discounting, financing and investments. We first ventured into the infra domain way back in 1991-92, when the power sector was opened up. But because of various reasons in Maharashtra even after signing a PPP, they did not allow us to go ahead.
Then in 1996, when the port policy came up, we embarked upon setting up a port in the state. Maharashtra had notified seven ports as per the policy and one of them was Dighi. After studying all the feasibility reports and conducting due diligence we zeroed in on Dighi. We subsequently bid for the project and signed the concession agreement for a period of fifty years with the state government in 2002.
What is the current status of the Dighi Port project?
We have all the clearances for the project including the environmental clearances. We are a customs notified port. We have already commenced some basic operations at the port like exporting bauxites and also some coastal operations.
We are currently operating on a small berth of 82 x 12 metres. We have gone ahead with the construction and the EPC contract has already been awarded for the north and south bank. We
feel the first berth should be commissioned by early next year followed by another two berths by the middle of next year. We plan to have five berths operational by 2012.
What have been the highlights of your company’s journey so far in context with this project?
This project has been a good experience for all of us connected with its development. I think we have been able to succeed inspite of the many challenges that came our way. Going ahead I hope we are able to stick to the schedule and deliver the port to the country on time. This port is going to be vital for import-export of goods and also to manufacturers.
It will also bring in a lot of investment into the state, since it will be a gateway to the state. Me, my sons – Vishal and Vikas and our technical team headed by Mr. Shukla is working hard to ensure that the project is completed on time without a hitch.
What is your assessment of the existing infrastructure scenario in the country?
I feel the government has done the right thing by focussing on improving our infrastructure in the 11Th Plan. Even if we manage to achieve fifty percent of the ambitious targets in the Plan, it will be a big achievement.
We have to improve our infrastructure across roads, power, ports and airports if our economy is to grow. The world has become a global village and good infrastructure is a key requisite if India is to become a part of the global economy.
What have been the key challenges faced by your company? How are you addressing them?
We have faced challenges across all levels – political, bureaucratic and local. But this is an integral part of doing business in this country. Its only the intensity that differs, some people face more hurdles while others may face less.
But once you have managed to convince the people and the government about your intentions then you do get all the support that may be required. It would definitely help if the government initiated
steps to set up a single-window clearance system for projects in India.
Which are your other ongoing projects in the infra domain?
In terms of exploring other infra-based opportunities we are also looking at a coal-based power project. We also plan to set up a Free Trade Warehousing Zone at the proposed SEZ, which will have cargo coming in and going outside India using Dighi as a hub.
As per the terms of the concession agreement, we are at liberty to make the port cost effective, user friendly and efficient.
We also plan to build a rail link of almost 40 kms from Dighi to Indapur-Mandgaon. We plan to widen the road that connects to Dighi. Our full concentration is on developing the port and ensuring good connectivity to it, rather than embarking on some new project.
We also plan on developing a Special Economic Zone around the port which will be a port SEZ for which we have also received the approvals. We feel this will be a composite development with a road, rail connectivity and a SEZ in and around the port.
ILFS has a 20% stake in the project while the state government will get 11% in lieu of the land. The total investment into the project thus far is approximately Rs500 crore, which will go up to Rs1,200 crore on completion of the first phase which includes three berths.
The SEZ and rail link are expected to cost another Rs1,000 crore which puts the total investment into the project at approximately Rs2,500 crore till 2012.
What is your outlook for the future?
The government has given thrust to infrastructure projects which is the need of the hour. Today our neighbouring countries are getting more foreign investments primarily because they have better infrastructure facilities then us.
As of today, our transactions costs are very high whether its roads, ports or power. The government should give incentives for infrastructure development projects in the country by allowing concessions. For a start there is a need to remove the service tax imposed on certain categories of infra projects like Greenfield projects and new constructions. PPP is also another avenue that needs to be encouraged whenever possible.
Interviewed by Rajesh Kulkarni