HCC's new townships on hold, to focus on govt projects

MUMBAI: Given the current turmoil in the market and subsequent impact on real estate, Hindustan Construction Company has decided to put on hold its planned townships in Pune, Nasik and Thane. Land acquisitions for these projects have been deferred for now given the high interest rates and low liquidity in the market.

HCC will focus more on government projects in power and water sectors and will look to bid for PPP projects with caution.

Speaking to ET on the sidelines of the quarterly results announcements, Ajit Gulabchand, chairman and managing director, HCC, said while the Lavassa and IT park in Mumbai is on schedule, the company has decided to go slow on the township projects in Pune, Nasik and Thane given the current market environment.

���One will have to wait and watch how the situation unfolds. Lower interest rates, greater liquidity and confidence building measures are needed,��� Gulabchand said.

He said the company is looking at the possibility of joint development of townships where land owners and the company get together to develop projects. ���It will help us save on cash outflows,��� he remarked.

Land required for these proposed townships was around 200-400 acres and senior officials at HCC said only 40-70 acres of land in each project has been acquired so far.

���The total investment so far has been to the tune of Rs 40 crore," officials stated.

However, the deferment of the projects comes as the company expects land prices to see a correction due to market conditions. ���We expect prices to come down; as a result the cost of land acquisition will become much more viable,��� officials added.

Gulabchand said while the current financial scenario is grim, the company will be focusing more on bidding for government projects in water and power sector in an attempt to insulate itself as far as possible.

���We believe in these times government will step up its direct investments in infrastructure which we will bid for,��� he said.
On PPP projects or BOT, Gulabchand said that the company will move cautiously given that interest rates are high and concession periods are short. ���Until factors like interest rates and concession periods improve, we will remain cautious about participating in infrastructure projects,��� he said.

At 2:36 pm on the BSE, HCC shares were at Rs 32.55, down more than 21 per cent from the previous close. The Sensex was down over 10 per cent at 8762.