E-freight in India - Cargo Talk

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pecific project financing, daily monitoring
of project activity, efficient project
management, creation of a systematic
project review mechanism and institution
building to strengthen the capabilities of
the infrastructure provider.
New Integrated
Transport Policy
on the anvil
The Government is working on a
new transport policy that would integrate
all modes of transport in a bid to moderate
prices and facilitate the movement
and supplies of goods seamlessly
throughout the country, informed
BN Puri, Member Secretary, National
Transport Development Policy
Committee, while speaking at the FICCI’s
Infrastructure Summit.
Speaking at the Session on ‘Policy
and Regulatory framework for PPP’, Puri
stated that at present the country does
not have a viable transport policy and the
existing one was outmoded and out of tune
for the requirements of a modern economy.
The transport policy framework, he
said, would delve into all aspects of the
implementation mechanism.
Puri’s statement assumes importance
in view of the urgent need to reduce the
high transportation costs in the country.
At present freight cost in India is almost
three times that of China.
The session was also addressed
by K Mohandas, Secretary, Ministry
of Shipping. He maintained that the
ministry is seriously looking to address
issues pertaining to mechanisation of
cargo handling, hinterland connectivity
and improving cost efficiencies in the
ports sector.
Mohandas agreed that there is a
clear consensus that the PPP is the most
effective model of funding. In the current
year the ministry has already identified
23 projects with an investment of `16,
`700 crore with a capacity of 232 million
tonnes. Further, he expected the ministry
to come out with the Coastal Shipping
Policy in the next two months.
42 CARGOTALK OCTOBER 2011
In this session, Yashwant Bhave,
Chairperson, Airports Economic
Regulatory Authority of India said that
the primary objective of the airport
sector is financial viability. He said that
the authority presently is working on an
approach paper which focusses on ensuring
‘fair rate of return’ on equity based on
capital asset pricing model, which is the
way to make PPP framework viable.
In his speech Raghav Chandra, Joint
Secretary, Ministry of Road Transport and
Highways said that India’s PPP model
is one of the most successful one in the
world. However he highlighted the
significant infrastructure deficit that
persists in the country and India still has
a long way to go.
For example, he noted that in India the
National Highways constitute only about 2
per cent of the total road network, while it
carries 40 per cent of the traffic. Chandra
added that the success of the PPP model
lies in the monitoring of projects in order
to keep the interest of stakeholders alive.
In the session ‘Financing
Infrastructure’, S K Goel, Chairman and
MD, IIFCL, said that his organisation
is aware of the gap in the infrastructure
finance deficit and the need to look at the
alternative sources other than commercial
banks. He informed that IIFCL is focussing
on the deepening of the bond market
and proposes to focus on credit enhancing.
IIFCL is also making efforts to offer partial
guarantee of 25-50 per cent face value of
the bond to good infrastructure developers.
Sanjay Palve, Group President and
Senior MD- Corporate Finance, YES
bank, infrastructure banking partner of
the Summit, noted that at a saving rate of
33.2 per cent there is no dearth of money
in India. The question to be addressed
is how and who should channelize these
funds into infrastructure projects.
He added that the nature of financing
required by infrastructure sector is very
different and the commercial banks
alone are not really geared to meet this
requirement. There is a need for the
government to woo other sources as
well. For this the development of the
bond market with credit enhancement
mechanism and giving priority lending
sector status to infrastructure is called for.
Manash Mitra, MD, Nomura
Infrastructure Investment Advisors Private
Limited highlighted the need to give special
attention to the bond market to attract
long term capital. He said infrastructure
is a very good asset class and can attract
a lot of investment interest. However, a
lot of regulatory hurdles continue to
persist which need to be addressed on a
priority basis.
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