The Hindu Business Line : IL&FS looking at equity stake in textile parks

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IL&FS looking at equity stake in textile parks

G. Gurumurthy

Mandated by Centre as project management consultants for SITPs

Coimbatore , June 2

Infrastructure Leasing and Financial Services (IL&FS) is looking at opportunities for equity participation in textile infrastructure projects being promoted across the country under scheme of integrated textile parks (SITPs), the private-public participation route devised by the Central Government to plug infrastructural gaps besetting major textile clusters.

The scope of an equity investment window in project financing for such SITPs is likely to put IL&FS in a commanding position in fund mop-up and deployment as it would shortly be entrusted with handling the entire turnkey services for 25 new textile infrastructure parks coming up under SITPs genre, the clearance for which will be in place by September-end.

IL&FS has been mandated by the Government to be the project management consultants for the SITPs since these textile infrastructure projects stand to get the 40 per cent capital subsidy in the total infrastructure cost expended.

"So far we have not entered into equity participation in any of the proposed SITPs, though we'll be figuring in term lending in these ventures. But we'll be willing to look at equity pick ups in textile park projects in which IL&FS is associated as project management consultants (PMC)," said Mr R.C.M. Reddy, Chief Executive Officer of the IL&FS' Cluster Development Initiative, the exclusive business unit of the leasing services company.

Mr Reddy, who is here to participate in review and reorientation programme for the IL&FS executives associated with various SITP projects under implementation, told Business Line that of the 25 SITPs proposed, 9 parks approved by the Centre are in advanced stages of implementation with their special purpose vehicle companies taking up positions by completing the required land acquisitions and their detailed project reports securing statutory clearances.

The likely investments to be brought into these parks by the promoters in the form of land, plant, machinery and buildings will be to the tune of around Rs 4,000 crore. Besides these nine, seven more SITP project proposals are likely to be cleared shortly and the remaining nine projects whose DPRs are already okayed by the authorities concerned will be through before September this year.

The reorientation programme for the IL&FS officials covered crucial issues in textile park project promotion such as legal requirements of SPVs/ professionalising its structure and management, procurement of technology/machinery for the parks, financial models and identification of cost-effective designing of the parks which should meet the business requirements of all the stakeholders of the project.

IL&FS as PMC is responsible for developing SITPs' institutional and financial structures for efficient implementation and has also roped in at least three major technical consultants including Wilbur Smith Associates and Ramky Infrastructure Ltd to offer professional expertise to the SITP promoters including the operation and maintenance post project execution.

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