THE SEE-SAW STORY

WHILE THE GOVERNMENT CONTINUES TO INVEST IN CREATING NEW INFRASTRUCTURE, SIGNIFICANT RISKS AND BROKEN BALANCE SHEETS HAVE SEE-SAW CAUSED THE PRIVATE SECTOR TO SHY AWAY FROM INFRA PROJECTS. AS SPENDING BY THE PUBLIC SECTOR IN INFRA IS SET TO SLOW DOWN, THE GOVERNMENT HAS TO LOOK FOR MEANS TO ATTRACT PRIVATE AND FOREIGN CAPITAL. SOME STEPS HAVE BEEN TAKEN, BUT WILL THEY BE ENOUGH?

- AVEEK DATTA

AT A PRESS CONFERENCE held by engineering conglomerate Larsen and Toubro (L&T) in January, a rather bizarre fact came to light. While discussing the various challenges that India’s largest engineering company faced in recent times, the management cited three unique problems in three different parts of the country to drive its point home.

In Mumbai, public interest litigation held up work on the ambitious coastal road project. Infrastructure projects in the National Capital Region came to a halt for 30-45 days owing to high levels of air pollution in winter. And the new government in Andhra Pradesh scrapped the previous government’s plan of building the state’s new capital in Amravati, leaving many infrastructure projects in the lurch.

These are mere samples of the various challenges that infrastructure creation in India faces. Be it for environmental concerns, legal wrangles, land acquisition issues or the collateral damage of political brinkmanship, getting an infra project off the ground and taking it to fruition need stakeholders—infra developers, investors, EPC (engineering, procurement, construction) players—to navigate a complex minefield. If one is successful, the upside is split between all: The government earns brownie points with happy citizens; EPC contractors get paid well; and asset developers and owners can expect to make a decent return on investment. If the project fails, the responsibility solely rests with the private sector.