BOT players expect road ordering to nearly double, in FY11. IRB Infra, in its recent analyst meet, said that NHAI targets to award ~15000km of road projects in FY11. Other leading BOT infrastructure players we spoke to indicated that ~50% of this target is achievable, translating into potential award of 7000-8000km of NHAI projects in FY11 (~20km/day, c. Rs700B in total), signifying 100% growth YoY.
Recent BOT ordering has seen sharp pick-up, but short of target: Until Feb-10, NHAI had awarded 39 projects (3385km, Rs340B), or 29% of annual target. Of this, c.Rs220B of LoAs were issued in the Dec- Feb 2010 period, showing sharp recent pick-up. In addition, bids for 38 projects totaling 3802km were invited by end Feb-10.
We spoke to managements of L&T, GMRI, IRB and RELI, who, together, account for 30% of YTD BOT wins - there seems to be consensus on minimum
IRR expectation. Both IRB and RELI believe that traffic growth should track in-line or slightly ahead of real GDP growth @7.5%. GVK, which has not won any BOTs this year, had a different view - they said that they could not secure their minimum IRR expectation (18%).
