The government has released Rs 102 lakh crore blueprint for infrastructure development. The national infrastructure pipeline will give top priority to energy, roads, urban development and railways in the next 5 years. The budgetary spend for infra will now go up from 0.83 percent of GDP to 1.1 percent of GDP by FY25.

Talking about lack of funding for infra projects, Nitin Patel, director, Sadbhav Infrastructure said, “Since last 1.5 years the entire industry is facing this funding issue. Second is availability of land and all the required ground level clearances upfront will be a bigger issue because that needs to be done in a very precise manner. So, before bidding this is required to be completed by all the authorities.”

“If the private sector has to come in, then a lot of things which were there that is the drawback so far as lenders are concerned – that’s the reason why they are not coming forward and particularly in build, operate and transfer (BOT) this needs to be given in clear manner in all the revised document in the concession agreement. So then we are of the view that private sector will come forward to participate in this big move,” he added.

Talking about hybrid annuity model, he said, “Compared to BOT, this will be helpful but most important is availability of 80-100 percent of the land upfront because when the projects are in the last leg or even after completion of 60-70-80 percent of the work, the land is not available and that portion is not taken out as per terms of concession agreement then the problems with lenders start. This same issue has been coming up and that’s why private sector is very cautious. Other than that hybrid seems to be reasonably okay if it is to be done considering this aspect then definitely it will be helpful,” he further added.