Canadian engineering major SNC-Lavalin Group Inc. is stepping up its presence in India, eyeing strategic stakes in infrastructure projects in the energy and transportation sectors. In its first investment, the $6 billion player has taken a significant stake for Rs 160 crore in Rayalseema Expressway Limited (REL).
REL is a special purpose concession company led by Hyderabad-based KMC Constructions to build and operate National Highway 18 connecting Cuddappah and Kurnool in the state of Andhra Pradesh. The estimated cost of the project is more than Rs 1,600 crore.
The REL project has a 30-year concession from National Highways Authority of India (NHAI). The project includes augmenting the existing two lane stretch to four lanes and operating the project on a Build Operate and Transfer (BOT) Toll basis.
SNC-Lavalin has had a presence in India since the 1950s and has executed projects in power and road-building sectors. It acquired firms like RJ Associates (Engineers) Pvt. Ltd., an engineering and contracting firm in 2005 and engineering firm Span Consultants in 2007 to boost presence.
But SNC-Lavalin is now also actively looking for strategic and financial investment for substantial across transport and energy sectors given the opportunities in this sector.
India may require $1.7 trillion in the decade starting 2010 to meet infrastructure demand and keep pace with economic growth and urbanisation, said a report by Goldman Sachs. Of this, power and roads alone may require upwards of $700 billion.
“We are excited about this first investment in the infrastructure sector in India. This demonstrates our long term commitment to the evolving Indian infrastructure market as a proactive infrastructure
player,” said Ajay Jain, Managing Director, SNC-Lavalin India Infrastructure.
“We view SNC-Lavalin as a strong long-term partner. Besides the financial investment, we will profit from SNC-Lavalin’s renowned project management and road building technologies as KMC expands its road concession business,” said Goutham Reddy, Managing Director of
KMC, which is backed by PE firms like Sequoia and Blue River Capital, has a portfolio of 10 road concessions.