The Hindu : Business : Difficult to achieve $500 billion investment target in infrastructure

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Friday, Jul 03, 2009
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Difficult to achieve $500 billion investment target in infrastructure

Special Correspondent

Economic Survey identifies constraints in promoting PPP projects

NEW DELHI: The Government may find it extremely difficult to achieve the investment target of $500 billion for the infrastructure sector during the XI Plan due to shortage of long-term finance, according to the Economic Survey for 2008-09.

“In recent years, tangible progress has been made in attracting private investment in infrastructure. However, such public initiatives are constrained by factors like inadequate shelf of bankable projects and lack of long-term finance. Issues like disputes over land acquisition, rehabilitation, contractual and environmental issues and shortfall of raw material and skilled manpower delays have impacted the financial viability of infrastructure projects in the country,” the survey said.

The survey, however, expressed hope that given the resilience that the Indian economy and its financial system has demonstrated amidst adversities, the issues will be addressed and suggested to the government for a regulatory authority for the transport sector covering highways, railways, ports and airports.

Constraints

It also identified six constraints in promoting PPP projects including policy and regulatory gaps, inadequate availability of long-term finance and inadequate capacity in the private sector.

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