Crisil Risk & Infrastructure Solutions Ltd, a 100% subsidiary of Crisil Ltd, is looking at international markets for its growth. The company is the sole consultant firm to the Gujarat government to formulate the state?s $200-billion infrastructure developmental programme, ?By 2012, we anticipate the international segment to contribute around 30-40% to our annual revenues,? said SR Ramanujam, CEO of Crisil Risk & Infrastructure Solutions.
Under the supervision of Crisil Risk and the banner of Infrastructure developmental programme titled Vision 2020, Gujarat Infrastructure Development Board is spending the amount in the state.
Vision 2020 aims to derive demand of various infrastructure services in Gujarat over next 10-15 years. It covers the development under public-private partnership model of power plants, seaports, airports, roads, urban infrastructure, water resources, industrial parks, railways and special economic zones.
Vision 2020 would also focus on the development of proposed dedicated freight corridors and Delhi-Mumbai industrial corridor in association with the government of Japan.
Ramanujam said his firm is also focused on providing infrastructure services in international markets like Africa, South Asia and South East Asia. ?Countries in these regions are looking at similar issues in attracting private investment in infrastructure,? he added.
Commenting on the infrastructure financing scenario in India, Ramanujam said although getting infra-loans for viable projects on variable interest rate terms for 10-15 years tenure is not difficult currently, the absence of an active corporate bond market is a cause of concern for all stakeholders. He expects increasing activity in private participation in the urban infrastructure, health, education and social sectors, in line with increasing government thrust in these sectors.
In its report, Crisil Risk suggests that even in emerging economies like India, which have a reasonably developed financial market, the breadth of products offered for infrastructure finance may not be adequate. Also, the momentum of private investment takes time to build and is also susceptible to market cycles, such as the one we are witnessing. India has put in place many hybrid instruments that straddle the gap between public finance and private finance.
The hybrid approaches include non-sovereign finance, viability gap funding schemes, annuity or unitary payment mechanisms, government owned or sponsored financial intermediaries and credit enhancement mechanisms. Each of these options combine the strength of public finance with market credit discipline and private efficiencies.