A castle in the air

Lanco’s Rao: Realty rise.

Lagadapati Madhusudan Rao doesn't like to think small. Seven months ago, the Chairman of Hyderabad-based Lanco Group stunned larger power sector rivals by bagging the ultra-mega (4,000-mw) power project in Sasan, Madhya Pradesh, thanks to an ultra-low price bid (Rs 1.196 compared to Reliance Energy's Rs 1.29 per unit). But subsequently, when the parent of Lanco's Singapore partner, Globeleq, which was part of the bid, decided to exit power generation business, the government decided to review Lanco's bid. When BT went to press, a group of ministers was to meet on July 24 to take a decision. "We are confident (of continuing with the project)," Rao told BT.

Of confidence, Rao has in plenty. Consider his next project: He wants to build the world's tallest residential complex, all of 112 floors, in Hyderabad. Like Sasan, the project awaits governmental clearances, including one from the Ministry of Civil Aviation. "Hopefully, we should get the clearances in a month from now and the work could begin to get the building ready in four years," says Rao. This residential venture, which hasn't been named yet but "will have a historical name", is to be part of the Rs 5,500-crore, 108-acre integrated techno-township that Lanco plans to set up near Hyderabad. Atkins of the UK, the same engineering consulting firm that built Dubai's landmark Burj Al Arab hotel, will design the complex. As for the project funding, "this is going to be mostly self-funded and we may only need Rs 1,200 crore by way of equity". This is Lanco's first foray into realty.

So far, Hyderabad has no building taller than 20-storeys, though a few projects in the region of 30 floors each are being proposed. What's got the super-sized residential projects to come crawling out of drawing boards is the city's decision last March to do away with the concept of floor space index. Getting people to live in a 112-storey complex may be a stiff challenge, but Rao is unfazed. Besides, he is in good company. Anil Ambani's Reliance Energy, Lanco's rival for the Sasan project, has just bagged a project to build a 100-storey trade tower in a business district it plans to set up near Hyderabad. Talk about competitive spirit.