While the UP government is remaining silent regarding the recent violent protests by farmers over Yamuna Expressway land acquisition, JP has stated that the protests will not hurt the project and that investors should not fear!
09.05.2011 (Moneycontrol.com): Jaiprakash Infratech is in damage control mode. It says the farmer protests will not impact its Yamuna Expressway project, report CNBC-TV18’s Anshu Sharma and Priyanka Ghosh.
Here is a verbatim transcript of Priyanka Ghosh’s comments on CNBC-TV18. Also watch the accompanying video.
Violence in towns along the Yamuna Expressway that’s being constructed from Greater Noida to Agra has put the spotlight in Jaiprakash Infratech. But the company says it has nothing to do with this agitation.
Manoj Gaur, Executive Chairman, JP Associates says, “Work is on track. In the past two-three days some attention has been diverted from work. The land has been taken long back and I can assure that the progress will not be affected. I would expect that the Expressway will be operational from the end of this calendar year. I am certain that the concerns that there will be an increase in land costs and timeline are unfounded.”
But analyst concerns are based on disclosures made by the company to the BSE on May, 7. The disclosure says the project will now be operational in July 2012 as the hand-over of land was delayed. It also says expenditure on the project as of March 31, 2011 has hit Rs 9,854 crore, higher than the Rs 9,739 crore mentioned in its DRHP. Analysts feel that in the next one year, this cost could go up by a further Rs 1,000-1,200 crore.
Industry experts fear that the unrest may hurt the company’s balance sheet, its debt already exceeds Rs 6,300 crore. And interest costs will also rise correspondingly. The company says that 165 kilometers has been paid for, what remains to be paid for is a part of the 6000 acres for real estate projects. While this may be true the fact is that all the land has not yet been handed over by the government.
JP Infra says more than 90% of the total land has been paid for. But some are worried that the unpaid portion may now come at a premium. And if compensation rates are revised, and landless people have to be paid, the company may have to cough up more money.
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