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Five infrastructure challenges before the Modi govt

Five issues in the infrastructure sector that the new government needs to addres. 

GVK Reddy        Last Updated: May 26, 2014  | 18:57 IST
Five infrastructure challenges before the Modi govt
GVK Reddy

Five issues in the infrastructure sector that the new government needs to address:

1. Provide gas to gas-based power plants: Today, gas-based power plants starved for want of gas have been shut down in the country, and there is a need to look at making gas urgently available to these units. Various options could be looked at, and ways to bear the costs worked out. For instance, importing LNG could be an option, but since it will be expensive, ways to bear the costs have to be looked at. The variable cost, which is primarily the cost of fuel, could be a pass-through to the local state electricity boards which are buying the power, or alternatively the central government could subsidise the gas cost through a mechanism that should be worked out.

2. Improving coal availability to power plants: India is rich in coal, but we are not able to produce enough to feed the thermal plants. There is a need to look at bringing in new players and technology to ensure better recovery.

3. Allow road project developers to sell equity after construction: There is a need to remove restrictions on the sale of equity after the project has been completed. If a developer is able to find a buyer who will abide by the concession agreement, he should be allowed to sell his equity in the road or expressway project after construction, and invest in another project. Not only would they be able to invest in other projects but today, given that quite a few infrastructure projects are overleveraged, this will allow them to deleverage themselves.

4. Privatise all airports: There is a need to privatise all airports in the country. This will ensure we get world-class facilities and speed up the development of this infrastructure.

5. Railways: Explore the option of privatisation in railways and the introduction of bullet / high-speed trains to speed up connectivity.

GVK Reddy is founder chairman and managing director of GVK.

(-As told to E Kumar Sharma)

 


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