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Saturday, Mar 12, 2005

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IDEB Construction keen to partner foreign cos

Moumita Bakshi

New Delhi , March 11

CLOSE on the heels of the Government's decision to liberalise foreign direct investment norms in the sector, IDEB Construction Project Ltd said on Friday that it is eyeing partnership with foreign companies for jointly undertaking construction, real estate and infrastructure projects.

"We are in talks with players and are looking for financial and technology investments. We will be interested in setting up special purpose vehicles with foreign companies for jointly implementing projects," said Mr S.D. Jha, Executive Director (Real Estate), IDEB Construction Projects.

IDEB Construction Projects is a Bangalore-based engineering construction company specialising in residential, commercial and infrastructure projects.

The company has four divisions - construction projects, real estate, framework manufacturing systems and hospitality. Besides the real estate division, which would contribute the large revenue chunk (Rs 115 crore) to the company's overall revenues this year, the construction division is expected to generate Rs 65 crore, and the manufacturing and hospitality divisions, Rs 10 crore each.

The company currently is in the process of executing real estate projects worth Rs 200 crore over the next 18-24 months, Mr Jha added.

Projects under execution include the Rs 95-crore SoftTech Park in Bangalore — the first phase of which has already been completed; Rs 35 crore Sigma malls in Bangalore which would be ready for possession in April this year; and over Rs 125 crore residential project — Springfield in Bangalore.

Mr Jha, however, expressed dismay over the recent Budget announcement relating to the imposition of 10 per cent service tax on construction of residential complexes having over 12 residential houses or apartments together with common areas and appurtenances, as also the increase in the levies on steel, saying the move would increase the cost of the flats by about 5 per cent.

"No player can absorb this additional cost and it will ultimately be passed on to the consumers," he said, adding that the industry was taking up the issue with the Government under the aegis of the Builders' Association of India.

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