The problems for the highway developers (Highway developers face policy speed breakers, February 4) are matters of serious concern. The lack of infrastructure is hurting the economy in terms of jobs, production and efficiency. Banks are looking at mounting non-performing assets from this segment. However, the problems are not all external to the developers. The bullishness in pursuing public-private partnership (PPP) opportunities and bidding for multiple projects at the same time were based upon faulty traffic and revenue projections. The recent troubles in Maharashtra with toll-booths also demonstrate that the willingness and ability of users to pay high tolls is lower than assumed by the developers. Many companies took on projects that were too large for them. Using banks to finance long-gestation projects is a practice that is fraught with danger for the banking system since banks mostly raise short-term money. Experts will have to come up with better solutions than just chanting PPP as the infallible mantra.
P Datta Kolkata
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P Datta Kolkata
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number