US$1bn expected from nine PPP-highways
More than 65 projects, that have been bid out under the public-private partnership (PPP) mode, are ready to be rolled out with work on some having started.
Bids are due from international bidders on January 7 for nine highways – six in the eastern part and 4 in the western part, according to Rohit Kumar Singh, member-finance in National Highway Authority of India (NHAI).
“We hope that these nine highways with 10 toll plazas would generate more than US$1 billion in the order of Rs 6,700 crore by March if the bids are successful,” he said at a conference organized by ASSOCHAM.
The money will be infused in highway projects which are non-viable for PPP kind of investment, said Singh.
The government has resolved most of the 103 stalled projects, with three to four currently under judicial interventions.
Highlighting the need to look for new ways to finance infrastructure projects, Singh said that there is a huge set of capital required to get into the sector. But keeping the cost of capital low is a big issue.
“Our banks are not aligned to funding infrastructure as the debt tenure of banks is 12 years while the PPP concessions are 20-30 years as such there is an inherent mismatch,” he said.
Conceding that government is facing bottlenecks like dearth of working capital availability for its ambitious Bharatmala scheme, Singh said NHAI is working on a system to ensure that project execution is not hampered.
“We are working on how to implement the project in a fast manner, we have to find ways and means to shrink the time it takes to execute a project,” said Rohit Kumar Singh, member-finance in NHAI, at a conference organized by ASSOCHAM on 1 Nov 2017 in New Delhi.
“One of the bottlenecks we are facing is working capital availability.
“There is an element of mobilisation advance which is 10 per cent of the project cost that is given but beyond that during the construction project implementors are facing problems of working capital,” he told delegates at ‘Sureties & gurantees: A global way to manage working capital,’ conference.
Without divulging the details of the process being developed, Singh elaborated, “We are working on a system as to how to facilitate a contractor with adequate checks and balances so that during the life cycle of the project he does not unduly suffer from lack of working capital and it does not hamper the execution of the project.” fii-news.com