<div><strong><span style="line-height: 1.4;">What in your view is the way forward on financing of infrastructure?</span></strong></div><div>The key issue will be to ensure that projects are structured in a way that risks are assigned to the appropriate stakeholders. Given the past track record of project performance, both equity and debt financiers will be very apprehensive about financing projects where risk has not been adequately parceled out. For example, while the government insists on land acquisition being the responsibility of private players, their inability to acquire land has led to huge delays which, in turn, has impacted repayments. </div><div> </div><div><strong>Will different approaches work better for different sectors - roads, airports, power and so on?</strong></div><div>Absolutely yes. The nature of projects is very different, as is the nature of the concession agreements. The common element is the duration of the loan – however, cash flows by asset type are different – so we will need different models and approaches to roads and power etc.</div><div> </div><div><strong>What is a possible solution to the roads and highways problem - where many developers have gone wrong on traffic estimates, overaggressive bidding and have promised high premiums ? Do you think PPP is of limited use in this sector?</strong></div><div>PPP will work, but we need a new model – of which the key elements are:<br /> </div><ul><li>Separate project construction and operations</li><li>Award construction of projects on an annuity basis</li><li>Government operates for 12 to 18 months to establish traffic base</li><li>Then award long-term OMT contract to specialized operators</li><li>Limit number of projects (by total value) given to any single company</li><li>Enhance PQ criteria – encourage partnerships with international majors</li></ul><div><strong>What in your mind needs to be done to revive power generation in India?</strong></div><div>Fixing issues around coal supply and distribution is absolutely crucial. With the current transmission plan, that element will get fixed – and all this together will spur investments in generation</div><div> </div><div><strong>What if anything can be done to curb inflation in your view?</strong></div><div>Different approaches for different sectors. Squeezing capital cash flows will create a larger inflation headache in the longer term</div><div> </div><div><strong>How can he adhere to fiscal discipline and lower the deficit ? Is cutting subsidies a desirable solution?</strong></div><div>Selectively cutting subsidies is a must – and getting closer to real market pricing. Recent decisions on rail were a clear example of what is needed—at the least.</div>
