The Hindu Business Line : `Clear-cut policy key to attracting private funds into infrastructure'

FOR GOOD GOVERNANCE: Mr Anil Khandelwal, Chairman, Bank of Baroda; Mr Kewal Handa, Managing Director, Pfizer India, and Mr Suresh Prabhu, MP, at a meeting in Chennai on Friday. — Bijoy Ghosh

Chennai May 25 Infrastructure projects implementation should be "divorced from the ministries" for timely implementation and attracting private sector investment, according to Mr Suresh Prabhu, Member of Parliament.

Addressing a seminar on `Innovations to overcome infrastructure bottlenecks' organised by the All India Management Association, here today, Mr Suresh Prabhu, said clear-cut policies and good governance were key to attracting private sector investments in infrastructure.

Though infrastructure investments should ideally be through public sector funding, India has no option but to look for private sector participation because of the scale of investments. The Eleventh Plan speaks of about $350 billion of investments in infrastructure.

Mr Prabhu, who had formerly as Union Minister handled power and fertilisers, said that often infrastructure projects were affected when both the State and Central governments were involved, as in the case of power projects. Political issues gain importance. Similarly, wherever infrastructure development involves use of large areas of land, as in the case of special economic zones and civil aviation, it would be `fraught with issues,' he said.

On the other hand, the success of telecommunication sector in attracting investments is a case in point. Only the Centre was involved, a clear road map was created and reforms resulted in less cost to the consumer. But power sector reforms falter because the consumer faces increased tariff, both State and Centre are involved and political issues come to the fore.

Realistic user charges were fundamental to the viability of infrastructure projects, bankability and attracting private investments.

Mr Anil Khandelwal, Chairman, Bank of Baroda, described the state of infrastructure as the "biggest embarrassment to India." Successive governments have recognised it as an area of concern but need to step up implementation. India as an investment destination for business was slipping because of this weak link.

Mr Khandelwal, also the Chairman, National Management Forum-2007, said that decisions have to be taken fast on investment options and incentives announced in a time-bound manner.