MEET­ING DEVEL­OP­MENT NEEDS

Assocham Bulletin - - GOVERNMENT INTERACTIONS -

The in­fra­struc­ture sec­tor is show­ing some signs of re­cov­ery but chal­lenges in terms of work­ing cap­i­tal is­sues still per­sist. Work­ing cap­i­tal man­age­ment is the cen­tral is­sue which guides the suc­cess or fail­ure of a project at the ini­tial stages. Speak­ing at the AS­SOCHAM Na­tional Con­fer­ence on 'Sureties & Guar­an­tees: A global way to man­age work­ing cap­i­tal', Mr. Ro­hit Ku­mar Singh, Mem­berFi­nance, NHAt high­lighted the need to look for new ways to fi­nance in­fra­struc­ture projects. He said that these projects are highly cap­i­tal in­ten­sive and keep­ing the cost of cap­i­tal low is a big is­sue.

Fac­tors like wages, ma­te­rial cost, equip­ment and ma­chine cost, in­fla­tion, all con­trib­ute to the work­ing cap­i­tal is­sues and should be es­ti­mated on an on­go­ing prac­ti­cal ba­sis. Mr. Singh said, "We are work­ing on a sys­tem as to how to fa­cil­i­tate a con­trac­tor with ad­e­quate checks and bal­ances so that dur­ing the life cy­cle of the project he does not un­duly suf­fer from lack of work­ing cap­i­tal and it does not ham­per the ex­e­cu­tion of the project." "There is an ele­ment of mo­bil­i­sa­tion ad­vance which is 10 per cent of the project cost that is given but be­yond that dur­ing the project im­ple­men­ta­tion, con­trac­tors do face prob­lems of work­ing cap­i­tal.' he added.

Con­ced­ing that gov­ern­ment is fac­ing bot­tle­necks like dearth of work­ing cap­i­tal avail­abil­ity for its am­bi­tious Bharat­mala scheme, but NHAI is work­ing on a sys­tem to en­sure that project ex­e­cu­tion is not ham­pered. "We are work­ing on how to im­ple­ment the project in a fast man­ner, we have to find ways and means to shrink the time it takes to ex­e­cute a project," he added.

"There is an ele­ment of mo­bil­i­sa­tion ad­vance which is 10 per cent of the project cost that is given but be­yond that dur­ing the con­struc­tion project im­ple­men­tors are fac­ing prob­lems of work­ing

cap­i­tal."

He also in­formed that there are more than 65 projects that have been bid out un­der the Pub­lic-Pri­vate Part­ner­ship (PPP) mode and that are ready to be

Re­lease of Knowl­edge Re­port: (L-R) Mr. Arvind Ku­mar, Former Ad­vi­sor, Min­istry of Road Trans­port & High­ways, Gol, Mr. Yadu­ven­dra Kano­ria, Im­me­di­ate Past Pres­i­dent, AS­SOCHAM, Mr. Dean Fin­lay, Di­rec­tor, In­ter­na­tional Busi­ness, CBL In­sur­ance Lim­ited, Mr. II S. II Rao,E

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