What will be the investment size for each station and what kind of arrangement will NBCC have with the Railways?
The minimum exposure to one station will be Rs 500 crore. The stations will be self-revenue generating, like the redevelopment in Delhi. The property will be monetised or sold and the revenue generated out of that will be used for construction. If there is surplus, it will go to the government. We may have to put in some seed money but once the property is ready we will get the money back.
From the Railways, we will get agency and marketing charges for the sale of a property. And if we invest our own money, we will get interested over and above it. Our investment will not be more than 5 per cent of total investment. We will immediately start leasing out property.
How far have you moved on this?
We have started calling out for design tenders. They will prepare the detailed project report and once that is approved, we will take them up one by one.
NBCC has bought land from Air India in Mauritius. Are you looking for buying its land in India also?
In Mauritius, we have built few buildings. We have worked for the Mauritius government and have constructed the Supreme Court building. We came to know Air India has some 1-acre land and a bungalow there in a prime location. We approached Air India for buying the property. Initially, we will use it for our office and guest house but later on, we may construct apartments on that land, sell them and keep one or two apartments for our company guest house. It will serve both the purpose commercial and our requirement for office.
In India, we have an agreement with Air India to develop and monetise their property jointly. That agreement was signed three years back and we are working on that. Air India may approach the government to allow them as well as NBCC to monetise and develop the property for revenue.
Will NBCC buy the land or will it be joint redevelopment?
The outright sale may not be immediately possible. It will not be like Mauritius. We will do redevelopment only. We have done surveys and detail project reports for two places in Delhi, one in Chennai but nothing final decided as yet.
What is the status on Pragati Maidan redevelopment?
We have called for fresh tenders with some amendments. The design was approved and by August-end, the agency will be finalised. September work will start. Already, we have demolished the structure. In 24 months, construction will be completed.
What are the other redevelopment works going on?
In Naroji Nagar in Delhi, we have taken licence from the World Trade Centre to construct a similar tower. Then there is Sarojini Nagar redevelopment. Besides, and we have projects for AIIMS. Our focus is to take up old government property for redevelopment. We may pitch in for affordable housing also. The government has a target of 5 million houses in five years so we will participate aggressively.
Analysts believe that the company is able to show growth on the back of government business, unlike other construction companies that are in problem. What is your view?
It is not always on nomination basis that we get projects. It is because of the performance of NBCC. There are 10-15 PSU construction companies.
Railway itself has some 15 PSUs but if they have chosen NBCC, they have realised that without NBCC they cannot complete such a big task. At the same time, the government is always supportive of NBCC.
Would you look at projects beyond redevelopment and outside the government portfolio?
We take only government projects. We have real estate projects in cities like Kochi, Patna, Lucknow, Kolkata, Alwar and Coimbatore. We own land there. We also do work for other ministries and institutions like IITs, AIIMs. We are working abroad in Maldives and Mauritius. Recently, we have opened a subsidiary NBCC International for international projects. We will be more aggressive in international markets.
Going forward, which of your businesses will give you maximum growth?
Maximum growth will come from redevelopment and project management. Last four years, we have increased our order book size from Rs 10,000 crore to Rs 70,000-80,000 crore. Our target is to increase our top line in two to three years. It is Rs 7,000 crore, which I feel should increase to Rs 21,000 crore.