13 Mar 2015 20:01 IST

Time is ripe for manufacturing in India: Chief Exec, Scomi Engineering

Monorail specialist Scomi Engineering, part of Malaysia’s Scomi Group, is looking for opportunities in India’s transportation infrastructure space. It is participating in the Bengal Aerotropolis Project at Durgapur, West Bengal, to set up a facility to make transportation equipment. By the end of the year, it hopes to fully operationalise the country’s first monorail system in Mumbai. It is also bidding for two more monorail projects.

In an interview with Business Line, Chief Executive Kanesan Veluppillai said the Durgapur facility will make components both for Indian and overseas markets. Edited excerpts:

What kind of opportunities Scomi is scouting for in the Indian market?

In Brazil, we have three monorail projects under operation for which we have set up a manufacturing unit. Given the demand for monorail in India, it makes sense to set up a local plant. Therefore, Scomi has entered into a memorandum of understanding with the West Bengal Government for being an anchor company in the Bengal Aerotropolis Project, which is coming up with an investment of ₹1,000 crore in Durgapur. In India, there is enough business for components for trains, metros, monorails, and light rail (trams). But many critical components are imported. Therefore, at Durgapur, Scomi, along with its vendors, will spawn a whole ecosystem for transportation equipment and components. We will also export the components to other countries. Given the location of the facility, it would be easier to send goods to Bangladesh, Nepal and Bhutan. The time is ripe for manufacturing in India as it has a huge market and trained manpower.

What impact will the recent land Ordinance have on infrastructure growth?

I believe the ordinance is a game-changer.

It will fast-track many infrastructure projects, which are stuck for want of various permissions. Foreign investors will get confidence, especially in the public-private partnership projects.

Earlier, the lead managers of many PPPs were not confident about project completion. In the last 20 years, a large number of PPPs got stuck because of land acquisition problems. It is a colossal waste of resources.

Can Scomi deliver the second phase of Mumbai monorail by end 2015?

The civil completion of the second phase of the line from Wadala in Central suburb to Gadge Maharaj Chowk in South Mumbai would be completed by July. After that, the line will undergo testing and I hope by the end of the year, the commuters would be able to use it.

The project has been delayed because of many reasons, including changes in alignment. The project got the single window clearance, but it could not be executed fast due delays in permission from multiple authorities. Our monorail projects in Brazil and Malaysia were implemented faster because they had a single execution authority. We need the same in India.

Will you borrow from Indian banks?

We would not be funding projects based on cross-border borrowings.

All the borrowing would be contained in India, therefore, services of local banks would be used.

Scomi is also looking at more joint venture partners and co-investors in our manufacturing projects, which will be expanding our business.

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