Efkon India to invest Rs 100 crore in the next 4-5 years

NEW DELHI: Efkon India, a subsidiary of European construction company Strabag, will invest more than Rs 100 crore in the domestic urban transportation and highways tolling business over the next four to five years, its chief executive officer told ET.

"With the National Highways Authority of India awarding increasing number of projects, we will step up our investments," Pushkar Kulkarni said.

Efkon, which offers solutions for the transportation market including toll collection systems and services, holds about 50% market share in the segment. Besides manufacturing toll system equipment, Efkon also operates two toll plazas on the Bangalore and Vijaywada highways.

According to the Mumbai-based company, the Rs 250-crore domestic highway tolling equipment market has the potential to grow ten fold over the next five years, while the toll plaza operation and maintenance business could double in the next three to four years, from Rs 600 crore at present.

"Since 5%-7% of the total project cost is of tolling equipment and on operations and maintenance, we see a larger portfolio in the next few years," Kulkarni said, adding that the company would be looking at operating more toll plazas in the future.

"As the market grows, more concessionaires will be looking at professionally managed services for toll operations and maintenance," he said.

Efkon, whose projected turnover for 2012-13 is about Rs 100 crore, is currently executing the Rs 50-crore Yamuna Expressway project.

While toll system equipment and services make up the bulk of the company’s revenues, logistics management, GIS mapping and vehicle tracking system contribute 10%-15%.

The company is also looking at higher revenues through installation of an automatic fare collection system for buses, which is a vital part of the Jawaharlal Nehru National Urban Renewal Mission. It is already working on one such project in Jaipur. Its other areas of operation are smart cards and setting up of clearing houses (providing settlement for transactions).

There are 1.5-2 lakh city buses in the country and the government has allocated Rs 45,000 crore under the city modernisation plan.

"About 10% of this would be for technology companies, which presents a huge opportunity for growth," Kulkarni said, adding that the approximate investment for setting up fare collection and tracking systems on 500 buses for five years would be Rs 60-70 crore.

Efkon’s parent company, Strabag, has presence in nine countries.