HIGHWAY TO GROWTH

Projects spread across country and cost Rs 500-1,000 crore each

WITH elections over, the government will soon consider clearing 21 infrastructure projects, at a total cost of about Rs 20,000 crore, to be implemented jointly by various state agencies and private sector developers. The model code of conduct for public servants during the national polls had forced central and state agencies to put on hold new public private partnership (PPP) projects.
    The PPP appraisal committee, chaired by finance secretary Ashok Chawla, will soon examine these projects, which are spread across the country. All of them are road projects, each at a cost of Rs 500-1,000 crore. About 13 projects have sought financial support from the government to achieve financial closure under the viability gap funding (VGF), said an official who asked not to be named. Under the VGF scheme, the government meets one-fifth of the total cost of the project, which could be doubled if the state agency feels so.
    The government feels spending on large infrastructure projects is crucial for protecting jobs and helping firms remain in business till the good times return. Besides making it easier for infrastructure project developers to access funds, the government had also decided to spend more on the sector last December. Of the Rs 20,000-crore extra Plan spending the government had announced last December to stimulate the economy, a significant part was allocated for building new roads.
    The official told ET that the government will also look into the grievances that infrastructure lenders may have. According to Hemant Kanoria, CMD of Srei Infrastructure Finance, it is difficult for such firms to borrow from multilateral agencies under the existing norms on overseas commercial borrowings. The private sector infrastructure lender wants the norms to be further eased.
    The PPPAC cleared two port and five highway projects in March with a spending of Rs 5,220 crore. Since January 2006, the panel has approved 101 projects, with an estimated cost of Rs 1,00,384 crore. These include 88 highways, nine ports, two airports, a tourism infrastructure project and a railway project.