MEETING DEVELOPMENT NEEDS
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
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....