Munjee was speaking at a seminar on ``Experiences in Infrastructure Financing'' organised by the Greater Mysore Chambers of Industry (GMCI) here on Wednesday.

Munjee further said that IDFC has already approved Rs 1,000 crore worth of projects since its inception in March 1998, which included four power projects and several road projects. The corporation envisages a strong advisory role for itself in the future and hopes to use its expertise in risk management,particularly commercial risk.

IDFC will set up separate advisory boards with international participation for sectors like power, ports, roads and telecom. These boards will monitor the progress of these sector statewise.

The corporation is also mooting the concept of ``back-stop facility'' or a stand-by facility. This facility will operate based on an arrangement that IDFC enjoys with the World Bank and the Reserve Bank of India. Through this mechanism, it can draw on funds from the through lines of credit as and when the need arises.

Commenting on the possibilities of mezzanine financing, Hemang Raja, CEO at Infrastructure Leasing & Financial Services Ltd (IL&FS), said that there are limitless possibilities, particularly to help leverage different risk appetites and induce the concept of quasi-equity.

IL&FS has also set up a special sinking fund as a provision for booking depreciation in financing the Delhi-Noida toll bridge project, which has achieved financial closure recently. The bridge willcommence construction next month.

The revenue profile of such infrastructure projects is back-ended and the assets are being maintained in perpetuity. This special sinking fund provision allows for increased profitability and early payment of dividend.

Karnataka not to fix ELRTS fares

The Government of Karnataka has decided not to exercise its prerogative to fix the fare structure for the elevated light transport system (ELRTS) proposed for Bangalore. According to BSC Raja, chief executive at Bangalore Mass Rapid Transport System (BMRTS), the nodal agency for the project, the system will be built between 2000 and 2004.

BMRTS has received permission to fix fares and a concession of 20 years has been given by the government till the system becomes viable and the debts are cleared. BMRTS has also suggested a realistic two-stage assessment of the project cost and asked the state government to entrust the implementation of the project to one single agency.

The mass transport system is being set upby UB Transit Systems, which is a consortium of the UB group, ICF Kaiser Engineers Inc, Transportation & Transit Associates Inc of the US and Nippon Shrayo Ltd of Japan and monitored by BMRTS.