It is for this reason that special institutions like IDFC and IL&FS have been created by the government to exclusively fund infrastructure projects so that these projects do not suffer from want of funds.

Infrastructure financing is more difficult than conventional financing and requires greater skills for the people handling the desk work to comprehend nuances in such vast fields of activities as IT, telecommunications, engineering, power, transportation environment, roads, ports and water supply. An infrastructure project can go wrongat any stage if it is not guided properly till the implementation stage. It is for the FI funding these projects to select the right people with varied skills to man its desks. From the success of IL&FS, it seems that it has done its homework properly in selection of manpower.

Of course, people alone are not enought. The institution itself should offer a platform for their career growth.

After the people and the organisation comes the technology. The development of a global free market is inextricably linked to advancement of technology. Technology is today determining the contours of markets and products as well as the economic policy enunicated by sovereign states. In the ultimate analysis, it is technology and its use/absorption that will determine the ability of individual nations and corporates to participate in the global market.

For infrastructural projects to gain momentum, the state governments should also take enough initiative and cooperate with institutions. This has been amply demonstratedby the Gujarat government agreeing to pick up Rs 10 crore of debt raised by Gujarat Toll Roads, a joint venture between IL&FS and the state government. Gujarat Toll Roads is associated with implementing the Rs 315-crore Baroda-Halol expressway project. Out of the total debt of Rs 90 crore envisaged for the project, IL&FS through its World Bank line of credit will be picking up nearly Rs 37 crore.

There is an unique feature of the debt placed with the Gujarat state government. It has an escalating interest-rate clause. While the interest rate in the first five years is around 3 per cent, it will escalate afterwards. In other words, there will be a low interest outgo for the company in the initial stages of implementation of the project. When the company starts earning income, the interest outgo will rise. When its income peaks, the interest outgo will also peak. This is a most scientifically devised system of fixing interest rates for loans granted to infrastructural projects. Commerical banks and other FIsshould also follow this method while lending to infrastructure projects.

The FIPB has cleared the proposal for increasing American International Group's stake in IL&FS from 70 per cent to 90 per cent. The company has also been allowed to raise its investment in utilised securities in investing companies from the existing 40 per cnet to 49 per cent. These steps will go a long way in toning up the performance of IL&FS.

IL&FS has agreed to implement a major roads upgradation and strengthening programme in Tamil Nadu with private investments on a BOT basis for a total of 512 km. The Tamil Nadu government has already amended the Indian Toll Act to facilitate private participation in the roads and bridges sector. Of late Tamil Nadu government is taking much interest in encouraging infrastructure projects.

Mahindra Industrial Park Ltd, a joint venture of the Mahindras, IL&FS and Tidco has already initiated the tendering process for taking up civil-construction work at the Rs 210-crore industrial park comingup near Chennai. IL&FS holds 40 per cent of the equity in the project. IL&FS is also to work out the financial plan of funding the first phase of the Rs 835-crore water-supply project in the textile town of Tiruppur. In its first decade, IL&FS has grown slowly and steadily to a position of strength. In its second decade, the company should make Indian infrastructure grow to a strong position. Then only our industrial growth will take off, and India can hope to become a developed country at least in the next decade after.