Challenges in infra sector being reviewed: Jayant Sinha to private firms

Asking investors to consider brownfield projects apart from greenfield projects in railways, highways and energy sectors, the minister said projects worth about $100-150 billion are in various stages of completion.

By: ENS Economic Bureau | New Delhi | Published:February 6, 2016 1:09 am

Seeking more funds in the infrastructure space, the government on Friday said that regulations are being reviewed to make the sector more lucrative for private players.

“We are working very hard to understand what the issues, challenges are. What further we need to do as far as the law, regulation and project structuring is concerned, so that we can be able to present you attractive returns and where risks are much lower,” Minister of State for Finance Jayant Sinha said at the second day of the India Investment Summit on Friday.

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Asking investors to consider brownfield projects apart from greenfield projects in railways, highways and energy sectors, the minister said projects worth about $100-150 billion are in various stages of completion.

Meanwhile, the finance ministry has asked states for their list of projects for financing under National Investment Infrastructure Fund (NIIF), Jayant Sinha said. The government is reviewing regulations and project structures to offer attractive returns to investors, he added.
“We have asked the states to send us their project pipeline. We are working in collaboration with the states…the government is working towards rule-based, policy-driven, non-discretionary style of governance so that there is no ambiguity…,” he said.

The minister added, “We are going through a process where these projects are being reassessed, new financing coming in…so I think for these projects there will be very attractive investment opportunities as the capital structure is reset.”

Sinha further said that the government is trying to rethink the manner of refinancing greenfield projects and trying to ensure that these projects get cash flow as early as possible. A number of funds like Apollo, Blackstone and Edelweiss are looking at these brownfield stalled projects, he said.

RBI deputy governor HR Khan also hinted at changes in regulations for attracting investment in infrastructure, saying, “we are open for regulatory changes as situation demands nothing is cast in stone.”

The government expects NIIF to become a major source of funding for infrastructure projects in the country from the next financial year starting April. Set up in December, the fund will have a corpus of Rs 40,000 crore, out of which Rs 20,000 crore will be from the allocated amount in Budget, while Rs 20,000 crore will be from private investors. The fund in which centre’s stake will not be more than 49 per cent was announced by the finance minister in the Budget for 2015-16 and cleared by the Cabinet in July.

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