Ex-Degrémont boss takes charge at SPML Infra
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SPML Infra’s water business has been growing at 20% a year. New president Srinivas Kishore talks to GWI’s Rama Rastogi about where the next spurt of growth will come from.
The former head of business development at Degrémont India, Srinivas Kishore, has taken over the role of president of SPML Infra’s water business – a big change after 25 years under the Suez banner, and one he hopes will herald a period of energetic growth.
SPML is a Bombay Stock Exchangelisted infrastructure development company which builds and invests in water, mining, road and power projects. Its revenues in the year ending 31 March 2010 were INR15.56 billion ($338.3 million), with income from water and wastewater services contributing $203.0 million, or around 60% of this total.
Speaking to GWI, Kishore explained that in his new role as president of SPML Infra’s water division, he intends to increase the value of orders from $435 million (as of March 2010) to at least $650 million by the end of current fiscal year in March 2011. His focus will be on restructuring and separating the water, wastewater and power businesses from each other, while centralising water operations in Delhi. “SPML Water is likely to grow at 25% annually, with most of its order-book coming from building pumping stations, piping networks, water and wastewater treatment plants, and from long-term O&M contracts,” Kishore predicts. SPML Infra’s water business has grown by 20% year-onyear for the last three years.
“To support this growth vision, we are looking at partnering with companies with expertise in varied fields,” he continues. Kishore’s personal experience and connections will come into play here. While SPML Infrastructure has grown in stature within India’s water and sanitation sector, desalination success has so far proved elusive, and SPML has been scouting for a suitable partner for more than a year. It is understood that the company is close to finalising a partnership with a foreign developer, most likely aqualia, Befesa or Aqualyng. SPML Infra is also looking at partnership possibilities with several European and Japanese companies with expertise in sludge management.
Kishore sees opportunities in mid-tier cities in India, which have a much greater need for infrastructure creation, and do not have as much access to funding as the large metropolitan areas such as Bangalore, Mumbai and Delhi. Private concessions in smaller cities such as Hubli Dharwad (Veolia) and Latur (SPML) are good examples.
Many more small and medium-sized water projects, including BOTs and O&M contracts, are coming up in cities such as Solapur, Kohlapur, Surat, Jamnagar, Aurangabad, Pune, and Ahemedabad, and government support, along with funding from the World Bank, ADB and JICA, is expected to drive growth in the market. “I see 70:30 partnerships between the government and private service providers in projects such as these, except in a few cases where it may be 50:50,” predicts Kishore.