In conversation with Dilip Kumar Gupta
The main objective of Sagarmala Development Company Limited (SDCL) is to promote port-led economic development, enhancing port capacity, improving port connectivity, developing new links of transport by providing them with financial assistance. The company is positively playing its role by investing in the new India’s growth story. Dilip Kumar Gupta, Managing Director, SDCL, in an exclusive interview, talks about the projects in which the company has made investments till now and the parameters which the company considers prior to making investments.
Q) How many infra projects have been funded till now by SDCL and how much investment has been poured in the projects? And what are their statuses?
Sagarmala Development Company Ltd (SDCL) gives financial assistance in terms of equity support only to the projects which are aligned to Sagarmala. The Sagarmala project is divided into four pillars: Port modernization and new port development, Port connectivity enhancement, Port-linked industrialization and Coastal community development. Thus, the company funds only infrastructure projects related to these four main pillars of the project.
We have made investments in three projects namely Krishnapatnam Railway Company Ltd., Road project of Vizag Port and Road over-bridge at Haldia Port. And, I am delighted to inform you that out of these three, two are completed and are in operation now. The railway corridor leading to Krishnapatnam Port which is one of the largest projects of INR 2,200 crores has started operations from 3rd July.
Q) Sagarmala Project is one of the flagship infrastructure projects of the Modi Govt. And, the Govt is intending to invest around 100 lakh crores for boosting the country’s infrastructure in the next 5 years. So, are you expecting that SDCL will receive a big chunk of this estimated fund for funding infra projects?
Government has given an authorized capital of INR 1000 crore to SDCL as of now. This is the initial authorized capital which can be increased as per the requirements of the government.
As of now, I am receiving budgetary allocations as per my requirements, the government is optimistic and we are trying to find out projects where we can provide equity support. There is huge private sector participation in the Sagarmala projects. There is no dearth of funds from the government as of now.
“Logistics companies should follow multimodal mix for transportation and for building related infrastructure, Sagarmala Development Company Limited is here.”– Dilip Kumar Gupta, Managing Director, Sagarmala Development Company Limited
Q) How many infrastructure projects do SDCL is financing apart from the Sagarmala projects? Can you give its highlights?
Apart from the three above mentioned projects (Krishnapatnam railway company Ltd., Road project of Vizag and Haldia port, we also have a 100% subsidiary company Indian Port Global Private Limited (IPGPL) which is looking into the Chabahar port operation. We have made four investments as of now.
Presently, 40-45 projects are in pipeline which are under financial due diligence as we prefer to invest in only those projects which have the potential of delivering at least 12%-13% of return on the investments.
Q) Are you working in collaboration with foreign players for the creation of world-class port infrastructure in India?
Several foreign investors are looking forward to working with us and one of the leading ports of Europe, Port of Rotterdam has signed a Non-Disclosure Agreement (NDA) with us.
Also, we are working together to identify projects where we both can put in equity funds and partner to take projects forward. In some time, they will settle in the country and provide technology and financial support. As far as investment size and other specifics are concerned, I will not be able to reveal the same due to the Non-Disclosure Agreement. However, we are working on 5-6 projects where Port of Rotterdam is willing to put equity.
Q) Execution of massive infra projects always face some hurdles due to the federal nature of India. So, what kind of hurdles you generally come across in the projects?
There are hurdles in every project. But, I think our whole country is in the mood of development right now. Undoubtedly, the land acquisition process poses a challenge in moving projects ahead but the government is dealing with it positively.
Sometimes, resentments on environmental issues come up but we are maintaining a balance between development and natural resources. I believe environmental challenges are not hurdles as sustainable development is the need of an hour. Communication is the key to make projects happen and getting environmental clearances.
Q) SDCL is looking forward to investing in railway infrastructure and warehousing. Have you made any investment in warehousing or MMLP?
Several projects are under consideration for making investments in Multimodal Logistics Parks (MMLP), however, none of the projects has been finalized.
We are trying to build efficient infrastructure for facilitating transportation at the least possible cost. And, MMLPs play a crucial role in lowering down logistics cost by providing adequate infrastructure for the intermodal transfer of cargo and it also helps in reducing the carbon footprint
Q) What message would you like to give to the logistics fraternity through this interview?
I urge the Logistics fraternity that they should give priority to the multimodal way of transportation in their supply chain for delivering cargo from its origin to its final destination. I recommend a multi-modal mix for transporting goods as it is an efficient, fast and cheap mode of transportation and it’s the need of the hour.
Logistics companies should follow this multimodal mix procedure and for building related infrastructure, SDCL is here.