Long term funding for large infrastructure projects will continue to be an issue till banks are fully recapitalised and the government comes out with new mechanisms and models of funding, according to Subramanian Sarma, CEO & MD, L&T Hydrocarbon Engineering.

In an interaction with media persons on the sidelines of a seminar on capital projects at the IIT Madras, he said, “till banks and the nation are fully recapitalised” long term funding will be an area of concern.

Also, all the stakeholders including “contractors and enterprises need more fiscal discipline,” he said.

They cannot afford to have ‘highly leveraged’ portfolios.

Countries in growth phase need huge funds and “need it critically” and the government has to come out with models for financial support including public-private partnerships.

In recent years, debt servicing has become a serious challenge in the sector, he pointed out. DK Ojha, Director, Infrastructure and Project Monitoring Division under the Union Ministry of Statistics and Programme Implementation, said the division will be coming out with a revised standard contract bidding document by the year-end.

This will create a win-win situation and encourage private sector participation in large projects.

Over the last decade the government has increasingly played the role of facilitator.

Related Topics
comment COMMENT NOW