Infrastructure and Railway Expansion In Focus: M.P. Singh’s Take on Budget 2025

Okay, thank you very much NDTV Profit for inviting me on this show.

Thank you. As we have two important orders yesterday, this is basically a very important initiative of the Government of India, the BharatNet initiative, to provide high-speed broadband connectivity to the gram panchayat level in various blocks of Western UP and Eastern UP. We have won contracts for the two biggest blocks under this initiative. Under this contract, we have to develop a middle-level network of optical fiber from block level to the gram panchayat level spread throughout the hinterland of the country. By providing this network, it will provide non-discriminatory access to all eligible service providers for providing service in rural areas. Under this contract, we have to lay optical fibers. In UP East, it will be around 5,600 km of optical fibers in 587 blocks and 43,000 gram panchayats. Similarly, for UP West, 26,000 km of optical fiber network is to be laid in 240 blocks and in 16,280 gram panchayats. The timeline for the execution has two components. The first part is within four years we have to lay the optical fiber network backbone spread over the various gram panchayats as well as the restoration of existing BSNL network which may have got damaged in due course of time. Thereafter, it involves operation of this network for the next 10 years in blocks of five years each. Basically, the contract is spread over a 14-year period.

Yeah, basically you are talking about the UP West contract. The total value of the contract is 3,622 crores, out of which 1,917 crores is basically the cost of laying the optical fiber network. Balance is the OPEX cost for the next 10 years. The total cost becomes 3,622.

Yeah, UP East... this network is to be provided in 48 districts of UP East. The total contract value is 9,613 crores. This is a bigger order. Out of which 5,800 crores is basically the initial cost of laying the optical fiber network, and the rest is basically OPEX for the next 10 years.

Yeah, our order book... by adding these two orders, our order book will be around 85,000 crores.

No, no. UP East and West covers the whole of UP basically. UP East covers 48 districts and UP West covers 27 districts.

Yeah, this 85,000 includes our core business from the railways also. Roughly 40,000 crores is our order book from the traditional business which we have got from the railways on the nomination basis. And the rest of the orders are ones we won in the last three years by bidding in various sectors. Some of the contracts we are already progressing. And like this BharatNet order, we have already devised a strategy to execute it. All this 85,000 crores, considering our current rate of growth and turnover, we hope to execute in the next three to four years' time.

Yeah, surely. Because as we have entered into a field where we were earlier doing works only on nomination basis, but now we have shifted to the more competitive market where we are winning projects through bidding. And gradually, we are also learning the trade's tricks. We hope to increase our margin in coming years from the projects which we are winning through bidding, and there is scope for that.

Yeah, we may not... on all the projects, the margins may be in the range of 8 to 9%, because some projects are run on very tight competitive margins. But yes, there are many projects where we hope to have a margin of not even 8 to 9%, but even better margins are also forecasted in some of our projects.

As the Government of India is very keen to develop the economy at much higher rates, the investment in the infrastructure sector is bound to come. And as you must have seen, railways, highways, and other infrastructure sectors, they are proposing a higher capital allotment for the coming financial year because the performance has been very good. So we hope to see a very good market coming up in the road sector where high-value contracts are forecasted in the HAM model or BOT models. Similarly, railways is also planning to go for high-value orders, especially connectivity to the Northeast area or in the Himalayan region where a lot of tunneling is involved, and the cost of the network with tunneling is always higher. And considering RVNL's expertise in tunneling and mega bridges, we hope to win a sizeable number of orders in the coming financial year.

Actually, frankly speaking, we cannot just forecast because it's a competitive market. We cannot say exactly what value we are going to win the orders at. But we hope to continue this present traction. And as you must have seen, in this financial year we have won a sizeable number of ERs in the first three quarters, and we hope to continue the same trend in coming years also.

Yes, yes, certainly. Because now we have spread over in various sectors—not only from our traditional fields, that is the railways, highways, metros—but we are going into digital infrastructure fields also, which is likely to open new doors in the field of satellite-based navigation systems, CCTV-based surveillance and security systems, smart cities. And railways is coming in a big way in LTE-based communication systems and similar orders also.