HCC secures Rs 500-cr claims in settlement with customers

Written by Shubhra Tandon | Mumbai | Updated: Jun 19 2014, 06:29am hrs
Hindustan Construction Company (HCC) has secured around R500 crore of additional claims as part of its efforts to settle claims with customers, mostly government authorities. The value of claims in the court, which have a favourable arbitration award, was over R1,000 crore at the end of 2013-2014, the company said in its annual report.

At last year's AGM, HCC's chairman and managing director Ajit Gulabchand had stated that nearly R5,000 crore remains unpaid to the debt-laden infrastructure company from different government authorities. Of this, R2,500 crore was across its various highway construction projects, and another R2,500 crore remained outstanding in the hydro-electric sector.

The company, in its latest annual report, said that although there have been some efforts to resolve infrastructural issues by the government, these have fallen short of expectations. "By the end of January 2014, the cabinet committee on investment (CCI) and the project monitoring group (PMG) had together undertaken resolution of impediments for 296 projects with an estimated project cost of R6.6 lakh crore. But it is the proverbial tip of the iceberg".

As of end-March 2014, 284 projects worth R15.6 lakh crore are under the consideration of the PMG. The company said there has been an increase in the number of projects without the commissioning date (mostly in roads), reflecting the growing uncertainty around their completion.

As for the company, in 2013-14, HCC was able to reduce inventory turnover to 292 days from 349 days in 2012-13 through renewed importance on inventory management.