Infrastructure investment is right on track, say CEOs

New Delhi : Despite growing apprehension over Indian Inc facing difficulty in raising overseas funds to meet investment plans in the wake of US financial crisis, majority of CEOs say infrastructure investments are on track.

Nearly 67 per cent of CEOs of major infrastructure developers and financiers of infrastructure projects in an infrastructure outlook survey conducted by Confederation of Indian Industry feel infrastructure investment is now picking up.

However, the survey also reveals that increase in inputs and interest costs have lead to cost overrun and is a cause for concern. The incidence of increase in inputs costs, as revealed by 46 per cent of respondents, is expected to be in the range of 10-20 per cent of infrastructure project costs and another 23 per cent of respondents expected this incidence to be more than 20 per cent.

Costs absorption

The Survey revealed that 46 per cent of respondents expected the increase in costs to be absorbed by infrastructure project developers, while 15 per cent of the infrastructure companies expected the cost to be passed on to the clients— mainly the government.

Assessing other factors responsible for any delays in project implementation, it reveals that land acquisition continues to be top most concern for project developers.

The survey enumerated the other key reasons for delay in implementation of infrastructure projects and revealed land acquisition, environment clearance and other government approvals to be the top three concerns for Infrastructure project developers.

Among these three, the CII survey revealed that 81 per cent of the CEOs felt that land acquisition was the most important impediment to infrastructure project implementation.

As per the survey results, 77 per cent and 58 per cent of the respondent CEOs felt that environment clearances and other government approvals respectively were among the top three concerns for delays in project implementation.

Source: Deccan Herald