It is already a significant player in India’s telecom and energy markets. Now, the Reliance Anil Dhirubhai Ambani Group (R-ADAG) has signalled its intent to get serious about another infrastructure business—roads.
Group sources who did not wish to be identified said that R-ADAG had won three bids for highway projects in Tamil Nadu and now plans to bid for more projects.
The group recently won a Rs516 crore project to construct a highway between the towns of Karur and Tiruchirapalli in the state.
Companies construct stretches of highway for the National Highways Authority of India (NHAI) on the build-operate-transfer basis, where the company that wins the bid is usually allowed to collect toll for around 30 years.
After this period, the company transfers the stretch of highway to NHAI.
Sources at NHAI, who spoke on condition of anonymity, said that R-ADAG had also bid for a stretch of highway between Bangalore and Kolar in neighbouring Karnataka, but it had failed to win the project.
An executive at R-ADAG who did not wish to be identified said that the group’s focus on the southern states was accidental.
“It was just that these projects were on offer when the company decide to step into the business,” he added.
The construction of highways in India has emerged as a lucrative business over the past few years with the government focusing on the golden quadrilateral and the NSEW (north, south east, west) projects—highways that link the four corners of the country.
Private sector participation in the business is dominated by companies such as Larsen & Toubro, Gammon, and the GMR Group.
A few Chinese and Malaysian construction companies too have made inroads into the business, but most international companies have kept away because the stretches of highway being offered by NHAI for development are much too short to be commercially viable.
Longer stretches make projects much more viable. The government has been considering doing this.