UPA government has to traverse through rough roads during its five-year tenure.
As it seeks to pump billions of dollars in building much lacked infrastructure in the country, the Planning Commission has found an innovative way to raise funds.
It probably may make one wonder about its feasibility.
If the whispers in corridors of ‘yojana bhavan’ are to be believed, private equity funds, who are plush with billions of dollars, may be the government's latest saviour as there is a suggestion to invite PEs to directly bid for infrastructure projects.
But are the PE funds ready for this larger role or do they prefer to remain mere investors?
After all, they can manage money but definitely not heavy engineering equipment to make roads and airports.
Parvesh Minocha, MD of Feedback Ventures, said, “PE funds typically do not have the expertise for construction and engineering activities. They are known to invest in portfolios. They might invest in big single omnibus project that has a whole gamut of projects."
However, experts say it will not be easy for the government to implement such a decision, if ever it is taken and will have to tweak bidding norms for its projects.
Vishwas Udgirkar, executive director of PwC, said, “There are certain conflicting clauses. There is the issue of common share holding of two companies which is a restricting clause at present".
Well, India needs more than Rs 2 lakh crore to set up roads and requires 78,000 mega watts to light up each and every district and village and over $25 billion to double the capacity of its ports.
Faced with severe fund constraint and an estimated fund requirement of over $500 billion for the whole gamut of infra projects the government is looking at several options. But how many of them will translate into workable solutions.
As it seeks to pump billions of dollars in building much lacked infrastructure in the country, the Planning Commission has found an innovative way to raise funds.
It probably may make one wonder about its feasibility.
If the whispers in corridors of ‘yojana bhavan’ are to be believed, private equity funds, who are plush with billions of dollars, may be the government's latest saviour as there is a suggestion to invite PEs to directly bid for infrastructure projects.
But are the PE funds ready for this larger role or do they prefer to remain mere investors?
After all, they can manage money but definitely not heavy engineering equipment to make roads and airports.
Parvesh Minocha, MD of Feedback Ventures, said, “PE funds typically do not have the expertise for construction and engineering activities. They are known to invest in portfolios. They might invest in big single omnibus project that has a whole gamut of projects."
However, experts say it will not be easy for the government to implement such a decision, if ever it is taken and will have to tweak bidding norms for its projects.
Vishwas Udgirkar, executive director of PwC, said, “There are certain conflicting clauses. There is the issue of common share holding of two companies which is a restricting clause at present".
Well, India needs more than Rs 2 lakh crore to set up roads and requires 78,000 mega watts to light up each and every district and village and over $25 billion to double the capacity of its ports.
Faced with severe fund constraint and an estimated fund requirement of over $500 billion for the whole gamut of infra projects the government is looking at several options. But how many of them will translate into workable solutions.
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