The Hindu Business Line : ‘Facilitate investment in infrastructure’

Chennai, July 10 Improving transparency and removing bottlenecks in the bidding process are the key to increasing the participation of domestic and foreign companies in infrastructure building, according to Mr Vipin Sondhi, Managing Director and CEO, JCB India Ltd.

He welcomed the Union Budget’s focus on infrastructure development and the financial support promised through the India Infrastructure Finance Company which is to refinance banks’ lending to infrastructure projects.

Mr Sondhi pointed out that India does not have an adequate contractor base of either domestic or foreign players.

This means that it has not been able to sell the idea of infrastructure building or that investors do not see good return on investments. The method of implementation of infrastructure projects is key to attracting investors. Issues relating to financing, involvement of the private sector and foreign players and institutions need to be addressed. If that is done, India is bound to be a centre of attraction as other avenues for investments are limited, he says.

The infrastructure sector is looking for a viable land acquisition and rehabilitation programme from the Government to speed up road and industry projects and measures to attract foreign direct investment in infrastructure, he says.

Steep drop

With the fortunes of the construction equipment industry closely linked to infrastructure, he says the equipment industry is looking at a steep drop after successive years of growth.

But the worst seems to be over if the last three months are an indication. The raw material prices have stabilised, there is some liquidity in the market and interest rates are set to drop. These are the positive factors that signal a change, he says.

Area of concern

For the construction industry, one area of concern is the need to regulate imports of second-hand equipment, says Mr Sondhi. With construction activity close to a standstill in West Asia and the South-East Asia, the Indian construction equipment manufacturers are facing a threat of idle equipment being dumped into the markets here.

This is not about competition, but about unregulated imports and cut-throat pricing, condition of equipment, emission and after-sales service. There needs to be guidelines on imports

Excon 2009

Mr Sondhi, who is the Chairman of Excon 2009, the construction equipment industry’s exposition by the Confederation of Indian Industry, says the industry is looking at promoting India as a sourcing hub for equipment and component manufacturers. At the event to be held in November 2009 in Chennai, Indian and international companies will showcase their products and capabilities. As of now over 47,000 sq.m of space has been booked and more than 350 exhibitors are to come in, including 100 overseas players, he says.

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