KOCHI: The storied Uralungal Labour Contract Cooperative Society Ltd (ULCCL) appears to be changing its track to explore new avenues of projects beyond its traditional focus on state government works and National Highway works, in a determined effort to diversify and enhance its revenue streams.
Talking to businessbenchmark.news, Praveen Kumar, general manager, Finance at Uralungal, said ULCCL is actively chalking out plans to win projects from outside the state through the tenders coming up for bidding.
“We being registered under the State Government Cooperative Societies Act, ULCCL is not supposed to bid for works from outside. However, we have taken the necessary approvals to go outside the state for new projects,” Kumar said.
“It’s a fact that the favours and concessions Uralungal currently enjoys in terms of project awards price advantages and cash advances for works, etc, will all soon become a thing of the past,” a leading contractor reminded businessbenchmark.news.
Govt owes Rs900 crore
Sources close to Finance Department said the Kerala State Government alone currently owes ULCCL around Rs900 crore for completed projects that include both billed and unbilled works, and this backlog has created financial pressure for the Society, which primarily undertakes capital intensive projects.
Rs400cr new loan
The ULCCL official said the society has already approached State Bank of India (SBI) and NABARD to raise Rs300 crore to Rs400 crore infra loans that can fund the new projects that the Society is planning to tender for. Kumar said ULCCL will not go beyond South India in search of new projects.
Kumar said ULCCL being a veteran contractor in road works will most likely bid for similar works only even when it explores new projects outside Kerala.
Kerala Government stake
Referring to the general notion that Kerala Government holds 84.7 per cent ownership in Ularulungal, a concept that has primarily been established by the rating agencies, Kumar said the fund invested by the state government has, in fact, originated from National Cooperative Development Corporation (NCDC) as a bridging facility.
But the practice has it that these funds are routed through the state governments. While the share of profit is given to the government to the extent of shares it holds with the money got from NCDC, an interest is paid against the loan part, if any, until both are paid back to NCDC through the state government.
ULCCL currently owes about Rs240 crore to NCDC through the state government, with Rs200 crore in the form of shares and the remaining as pure loan.
The major clients of the Society include National Highways Department for Highway projects, Public Works Department of Government of Kerala for State Road Development, Central Ministries such as Ministry of Panchayat Raj for rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY), several state government ministries such as Local Self Government, Co-operation, Tourism etc., and a host of reputed private enterprises.
ULCCS as on September 30, 2024 has an order book worth Rs5028.90 crore, Rs4052 crore to be completed in 24-30 months providing healthy revenue visibility over the medium term. Further to this, ULCCS has received new orders worth Rs280 crore in November, 2024.
