NEW DELHI, DECEMBER 16: India's long-term lending institutions are sitting on a pile of nearly $7 billion, blocked by administrative and regulatory hurdles in building vital infrastructure projects, a key official said on Thursday."FIs (financial institutions) today have an overhang of Rs 30,000 crore ($6.9 billion) of undisbursed funds," Nasser Munjee, deputy managing director of Infrastructure Development Finance Company Ltd (IDFC), told an infrastructure seminar organised by the Confederation of Indian Industry (CII).Officials said India, in a hunt for funds to build ports, power plants, roads and telecommunciations, had progressed considerably since beginning a reform programme in 1991 to usher private and foreign funds into the state-controlled sector.But they identified bottlenecks holding up projects, and said there is still a long way to go considering that four years ago a government panel estimated India needed $ 300 billion over the next decade to build infrastructure.RED TAPE:Industry officials say tussles between regulators and bureaucrats, delays in working out legal details which would enable bankable contracts for road building and courtroom tussles involving environmental and political protests have blocked projects from coming up fast despite a huge demand.US-based Cogentrix and HongKong-based CLP Power, a unit of CLP Holdings Ltd said last week that they had ceased work on a $ 1.3 billion project because of delays in government approvals and in resolving a public interest litigation.Officials are busy wooing back Cogentrix's consortium to resume the project, seen as a policy bellwether. The consortium has said it may reconsider but only if certain conditions are met. Government agencies have also been reluctant to price utilities to encourage economic viability.However, reforms to open up the state-controlled insurance sector, a new telecom policy with liberal terms for private firms, and a carefully stitched up model agreement to aid private road contracts areseen as key landmarks.A study by consulting firm Pricewaterhouse Coopers Ltd and CII for the seminar said India needed to create an appropriate legal framework for securitisation of loans and also cut high stamp duties on bond transfers.The duties are considered a hindrance to developing a secondary debt market crucial for infrastructure funding. The study called for "parallel reforms" to boost securitisation. It also said differences between the telecoms regulator and the government's communications department had undermined policy initiatives to boost investment.
