Pension funds expected in infra assets
The next five years should see the commissioning of marquee projects like the Western Dedicated Freight Corridor (DFC) while there would be additional airports in Mumbai and Delhi NCR, according to a senior Indian industry official.
Cities would get affordable housing and public transit, said Shailesh Pathak, CEO of L&T Infrastructure Development Projects Ltd.
There would also be a steady increase in clean energy, especially solar in the renewable basket, electric mobility, a national gas grid with city gas distribution replacing cylinders in urban households.
“We hope that most assets currently operated by union, state and city governments would be given out to using Public Private Partnership structure under asset recycling,” he wrote in the Infrastructure Today, an annual issue of in-house publication of L&T IDPL released 13 Jan 2020.
Noting the current project funding challenges, he pointed out that construction funding is largely going to be from government funding as it is, with selective private investment where appropriate.
During the post-construction or cash-flow generation stage, financial intermediation would take over from global and Indian investors, believes Pathak.
With visible cash-flow performance, international dollars from long-term patient capital investors such as pension funds would gladly replace Indian rupee at a premium.
Even within domestic markets, Indians are deploying much more of their savings in financial investments such as mutual funds.
Such surplus capital pools would also be deployed in either asset investments or bonds to be issued by governments and or corporates, said Pathak. fiinews.com