IRCON eyes Railway projects in Malaysia, Bangladesh

The engineering & construction company under the Ministry of Railways recently bagged a project for upgradation of Railways in Sri Lanka.

NEW DELHI: State-owned Ircon International is looking to expand its footprint in Malaysia and Bangladesh and eyeing a revenue growth of 30%, its chairman, SK Chaudhary, told.

The engineering and construction company under the railway ministry recently bagged a project for upgradation of railways in Sri Lanka, and is expecting railway projects to materialise in Bangladesh and Malaysia.

Chaudhary said he expects Ircon to bag new projects in these three countries, which along with the ongoing rail projects in Bangladesh and Myanmar, could boost revenue growth to 30% year-on-year. The company had registered 20% growth in revenue in 2018-19.

“Overseas business is our main focus. Profits come from there. In most of the projects in India, quality is compromised in getting bids at the lowest price. That must change,” Chaudhary said. “Track record of a company is a must in winning projects.”

Overseas business currently accounts for 13% of Ircon’s overall portfolio. The company expects it to grow to 25-30% in FY20, said Mukesh Kumar Singh, director of finance at Ircon.

In 2013-14, overseas projects accounted for 49% of the company’s business. The decline in overseas business came due to administrative reasons.

“We had some difficulty in appointing the JV partners and agents who were locally required to be appointed in a foreign country. We have now formulated new guidelines which are in the process of approval,” Singh said.

In Malaysia, the company is close to finalising a rail project while a railways and roads project is also coming up in Sri Lanka, Singh said.

The company expects to gain from the renewed infrastructure push of the new government.

“Railways will be the biggest chunk of the Rs 100 lakh crore investment because a lot of doubling, tripling (of railway lines), electrification, even signalling changes will take place. So things are looking positive on increasing our order book as well as turnover,” Chaudhary said, adding he expects investment of Rs 12-15 lakh crore in the railway sector alone over the next five years.

IRCON, a PSU tasked with construction of railway tracks, expects orders worth Rs 10,000 crore from the government in the current financial year, Chaudhary said. The company is also looking to bid for key infrastructure projects in the country, including the Gujarat-Maharashtra bullet train corridor and the Zojila Tunnel in Jammu & Kashmir, he said.