The Hindu Business Line : Pvt participation in infrastructure development<br>World Bank keen to partner Govt on viability gap financing

THE World Bank has agreed to explore with the Government ways of creating a viability gap-financing fund to encourage private sector participation in infrastructure development.

"We did talk with the Finance Minister and other officials the concept of gap financing where there might be viable private sector infrastructure investments that require public investments to get them off the ground. The concept, in principle, makes sense to me and my staff," Mr Paul Wolfowitz, President, World Bank, said at a wrap-up press conference at the end of his four-day visit to India.

He, however, added that the devil was in the detail and the Bank had to look at individual projects.

Given the magnitude of India's infrastructure needs, he felt it was a good idea to consider certain areas where private sector could contribute certain resources to meeting those needs.

At the same time, Mr Wolfowitz also said it had to be recognised that there were important areas where it had to be public-related investment principally. It was here that projects like Bharat Nirman for rural infrastructure development found a place.

The World Bank President said electricity, roads and irrigation system development under such a project (Bharat Nirman) could be a platform on which private sector in the agriculture sector and enterprises around the agriculture sector can flourish.

Asked whether the World Bank intended to hike its annual assistance commitment to India from the current $3 billion level to $4 billion level in the wake of Bharat Nirman, Mr Wolfowitz was somewhat doubtful as to whether this would materialise.

"Our current plan (for India) over the next three years would be $3 billion a year. We are a big institution but we are not as big as people sometimes think. I don't know if we could scale up exactly as you are suggesting. Getting to this $3 billion-a-year-level is a considerable increase for us," he said.

Mr Wolfowitz, however, said that any request from the Indian Government that goes beyond the currently contemplated level of assistance would certainly be looked into and seen whether it could be met. The World Bank's annual assistance to India increased to $2.9 billion in 2004-05 from $1.4 billion in the previous year.

On whether India would sustain its current growth rates in the coming years, he felt it would be dangerous to make any predictions. "I have an intuition that it is possible to do couple of percentages better and I hope you get to that level. It is also possible that if you don't continue with sound fiscal policy and sound monetary policy, it can take some effort to sustain the high 6-7 per cent level," he said.

Onwhether the Bank would fund nuclear power plants, Mr Wolfowitz said it might not be possible to fund civilian nuclear power plants due to the risks and environmental concerns.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
60,000 aspirants visit The Hindu job fair on day 1

Villages must tap biogas for power needs, says PM

Pvt participation in infrastructure development
World Bank keen to partner Govt on viability gap financing

Officers body of oil cos seeks review of petro-products pricing

Apparel training centre signs MoU to help BC students

Govt plans wine board to help industry grow — May de-link the beverage from other hard liquor

Borrow some good ideas

Tax before a house sale?

The security of your nest

Survival guide for landlords

`India must harness strength of large talent pool'

Donations to NGOs, charitable bodies may be spared from FBT