IRCON to increase focus on telecom

By : |January 3, 2000 0

NEW DELHI: IRCON, the public sector undertaking under the Ministry of
Railways whose main focus is construction of railway infrastucture, will
increasingly focus on providing telecom infrastructure. It has planned a Rs
100-crore fibre-optic project between Delhi and Mumbai, and once the rules of
long-distance telephorny become clearer, it will make an increased pitch into
that segment as well. According to IRCON general manager, (signals &
telecom), Rajiv Sinha, IRCON always had the technical know-how of installing
telecom infrastructure, it was only a question of `when` in making a foray into
the public domain.

The Delhi-Mumbai fibre-optic project is IRCON’s first significant telecom
project. It has signed an MoU with thre Ministry of Railways to lay optical
fibre cables along the 1,500 km-long stretch. The Ministry has provided right of
way to provide for the communication requirements of the Railways, and selling
lines to telecom players. In return, IRCON will share 20 per cent of the profits
accruing from the project with the Ministry. It has already started work on the
Ahmedabad-Vadodara stretch of the Delhi-Mumbai section. The amount spent by
IRCON on this stretch will be treated as IRCON’s equity in the joint venture.

IRCON is in the process of selecting a technical partner who has extensive
experience, and British Telecom is alleged to emerge as a likely partner. Others
being considered include Telstra and Tata Telecom. Enron, BSES and ICICI are
likely to be equity partners in the project where IRCON will hold 50 per cent
equity. The remaining 50 per cent equity will be distributed between two or
three joint venture partners. Over the last eight years, it has executed several
smaller communication projects for the Railways and more recently for another
public sector, GAIL. It is currently implementing the over 800 km-optical fibre
communication network between Vijaypur in Maharashtra and Dadari near Delhi for

This is the first telecom project undertaken for a client other than the
Railways. The Rs 10-crore project which was undertaken as a consortium by IRCON,
PCL and Tata Lucent is in the process of being handed over to GAIL. IRCON is
also in the process of implementing the communication network on the Eastern
Coast for the Railways. The 800 km stretch between Vishakapatnam and Cuttack is
part of the Railway electrification program and is pegged at Rs 16 crore. On a
smaller scale, IRCON has implemented a 90-km stretch of optical fibre around the
railway stations in Delhi. In the overseas market, it has recently bagged a $122
million contract in Malayasia to construct railway infrastructure, which will
also involve laying down a 40-km fiber-optic stretch connecting three stations.

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