This was announced by P S Subramanyam, chairman, UTI, at the international congress on express highway development here on Monday. He also confirmed that the Millenium Fund will be launched before March next year.

The announcement provided the first spark in the otherwise lacklustre inaugural session. Subramanyam also said that UTI would relaunch schemes such as Rajalaxmi and the retirement benefit plans. Since these had a tenure of 15-20 years, the funds were ideally suited for investment in infrastructure projects.

He also clearly outlined the major concerns for lenders, which included construction, revenue and forex risk. The first is being perceived as one of the most important risks as typically delays in land acquisition affect financial closure resulting in time and cost overruns.

Asking for a central governmentguarantee to lenders, Subramanyam justified the need for one. Most of the debt or equity would in all probability not be listed, making the investment ill-liquid. Also with high revenue risk the price would not climb above par, cutting off an exit route for the investor. Given this backdrop, the government would have to make the extra effort to provide some comfort.

Delegates at the conference, particularly the potential private sector participants were a little concerned with the lack of progress on projects. According to S.Seshadri, vice president, Ispat group, the government had made little progress on basic issues such as land acquisition. To discuss private sector participation at this stage, therefore, was premature, they felt.

In reply to this secretary in the ministry of surface transport R.Vasudevan, said that unlike in projects earlier tendered, the government will now complete all formalities such as land acquisition and environmental clearance before starting the bidding process.

A.Ramkrishna, president L&T, while discussing the issues involved in privatisation from the point of view of contractors said that the government needed to do a lot of groundwork before embarking on these projects. The matter of quarrying licences, which are in the hands of state governments, would first have to be looked into as it could become a major impediment in the way of time-bound completion of projects.

While the conference had several delegates from the private sector, it was largely dominated by the government sector. Potential private sector investors are perhaps still waiting to see if any major policy changes are forthcoming before making any commitments.

And unless the legislative and policy framework is put in place the target of a 30 per cent private participation in infrastructure projects expected by the government may not materialise at all.