Ashoka Buildcon Wins REC Power Project, ₹126.54 Crore Annual Charges For 35 Years

Mumbai: Ashoka Buildcon Limited secured a Letter of Intent from REC Power Development and Consultancy Limited for a significant power transmission project in Maharashtra. The project entails constructing a 400/220/132 kilovolt air-insulated substation at Sakoli in Bhandara district. This award came through tariff-based competitive bidding, as stated in a stock exchange filing on August 13.

In return for their services, Ashoka Buildcon will receive annual transmission charges of Rs 1,265.37 million, equivalent to approximately Rs 126.54 crore, over a 35-year period. This long-term revenue stream presents a stable income opportunity post-construction completion. The company is mandated to fulfill the project within a 24-month timeframe.

Following construction, Ashoka Buildcon will be responsible for operating and maintaining the transmission asset for the next 35 years. The project has been awarded to a domestic entity and will be executed within India. The new substation is projected to bolster the power transmission network around Sakoli and extend its benefits to the wider Bhandara region.

To safeguard the interests of REC Power Development and Consultancy Limited, the selected bidder, Ashoka Buildcon, must furnish a performance bank guarantee amounting to Rs 16.70 crore within 10 days from the letter of intent date. This guarantee serves as a safeguard for the project-awarding body in case the chosen company fails to adhere to the agreed terms, a standard requirement for substantial infrastructure contracts.

It is noteworthy that Ashoka Buildcon's promoters, promoter group, and group companies have no affiliation with REC Power Development and Consultancy Limited, nor does the contract entail a related-party transaction. The company disclosed this information in compliance with Regulation 30 of the Securities and Exchange Board of India's listing rules, ensuring transparency in the trading window for designated persons and their immediate relatives, which will remain closed for 48 hours post-declaration.