Consultancy major RITES to go in for IPO

May 4th, 2008 - 1:38 pm ICT by admin  

By Prabhat Sharan
Mumbai May 4 (IANS) Government-owned infrastructure and logistics consultancy major Rail India Technical and Economic Services Ltd (RITES), which has a sizeable presence in Africa, is likely to hit the capital market for an IPO in the second quarter. RITES is also planning to enter into public private participation (PPP) ventures, company managing director V.K. Agarwal said.

“We are awaiting a clearance from Sebi (Securities and Exchange Board of India) for our IPO. It is just a matter of time, and it is precisely for this reason that we have started contemplating to enter into PPP, BOT (Build Own Transfer) and BOOT (Build Own Operate Transfer,)” Agarwal told IANS in an interview.

According to Agarwal, who has witnessed the growth of RITES as a consultancy and project management services company internationally: “The world of infrastructure projects is witnessing a paradigm shift from consultancy to simple execution of projects to PPP. The possibilities for providing advisory services for government bodies, including the monitoring of PPP projects in infrastructure sector, are immense and that is one of the primary reasons behind our decision to enter the capital market.”

Citing projects in Africa, “a continent considered world over as the continent of future, we were and are the most sought after infrastructure, logistics and engineering project management service provider. We have noticed a marked and visible interest among the governments there for developing rail sector, like in any developing nation. And most of the projects fall under the categories of PPP, BOT or BOOT.”

The sudden rush in Africa, considered to be a continent with the most difficult terrain, has now got them a plethora of rail projects in the pipeline. “Our experience with the world rail giant Indian Railways has given us immense experience to handle and set up rail projects in any part of the world. In Africa, we are leasing locomotives and other rolling stock. In India also we intend to lease our rolling stock for captive rail systems, and in this process we have initiated several joint ventures with financial bodies for funding purchase of additional assets. This funding, we hope would also help us in our allied joint ventures.

“We have inked agreement with three mining companies in Africa for transporting their coal to Beira Port, which incidentally falls into the Beira rail corridor project assigned to us for development by various government bodies,” Agarwal informed, adding, “infrastructure is the in-thing and will remain in the coming decades”.

What about the future infrastructure development projects in India? Agarwal said that RITES will be submitting a feasibility report on the possible transport scenario that may emerge in 2020.

“The Planning Commission had assigned us to study the inter-modal transport systems. Earlier, studies were done in 1979 and 1987. The present day plans are based on those studies. Our study focuses on traffic pattern and the perception of what would be unit per transport mode and how to minimize the possible cut throat competition that may arise between various transport modes.

“After our second round of survey, we will be able to come to a logical conclusion and give our recommendations to the government,” Agarwal said.

Agarwal informed that RITES was carrying out the engineering-cum-traffic survey for east and west dedicated freight corridor (DFC) between Ludhiana (on National Highway 1, in Punjab) and Sonnagar (Bihar) and Delhi-Mumbai. These corridors will also link the major logistics parks conceptualized for Indian Railways at Nagpur (Maharashtra,) Durgapur (West Bengal,) Ludhiana (Punjab) and Vapi (Gujarat.)

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