Speed of implementation is the difficulty here

Written by Subhash Narayan | Timsy Jaipuria | Updated: May 9 2014, 03:17am hrs
As an official development assistance (ODA) agency of Japan, Japan International Cooperation Agency (JICA) has contributed to Indias physical and social infrastructure by playing a pivotal role in funding the Delhi Metro and now the Delhi-Mumbai Industrial Corridor (DMIC). India is the largest recipient of Japanese ODA currently. Shinya Ejima, JICAs chief representative in India, in an interview with Subhash Narayan and Timsy Jaipuria, shared the agencys vision for India and talked about the new areas it would like to extend financing to. Excerpts:

What role do you see for JICA in Indias infrastructure growth

India is one of the most rapidly developing countries in the world, with good economic growth over the past two decades. JICAs assistance in infrastructure development not only directly contributes to Indian society and economy, but also acts as a catalyst in attracting domestic and foreign investments. Apart from funding infrastructure projects, we are also engaged in providing technical assistance to projects, including the knowhow for optimal operational performance.

The tragic 2011 earthquake resulted in some cuts in Japanese ODA. Has it affected funding to India too

No, it hasnt. In fact, the volume of funding has increased after the earthquake. India, right now, is the number one recipient of JICAs ODA loans even though Japans ODA budget has been decreasing for the last 15 years. And, going forward, as Indias infrastructure needs continue to grow, we see the graph only going up. We have committed $3.5 billion for the current year, and it will be formalised after the new government is formed in India.

Which new areas are you looking at

We have been supporting sectors such as transport, energy, water, forestry and agriculture. Apart from these, JICA is extending financial and technical support for development of India's industrial corridors. We have also funded a few road and power projects even though we have not provided financing for power generation for over a decade. This (funding power generation) would be explored if the Indian government comes up with projects. We would also like to finance geo-thermal energy projects, an area where Japan has very rich experience. Also, we have not done any airport projects in India, but we are open to funding the sector.

Are you looking at funding road projects in the northeast too as part of the proposed ASEAN highway

ASEAN highway is Asian Development Banks (ADB) idea, and the Japanese government has been enrolled into it. In southeast Asian countries, we have financed a part of the ASEAN highway network; in India, in the northeast, we have had a series of discussions with the government. The idea is to connect India with neighbouring countries like Thailand through a road network. In fact, not just road, but we are also thinking of a sea connection from Chennai or southern India to southeast Asian countries such as Thailand or Singapore. We are concentrating on the southeast Asian network.

How has your experience with the dedicated freight corridor been

My understanding is that it is on track.

Some of the packages got delayed because Japanese investors were not available...

Both JICA and the DFC are patiently trying to solve the issue. Of course, we are behind the schedule, but most large infrastructure projects tend to get delayed.

Why are Japanese companies showing a lack of interest

It purely depends on the private sectors business and strategy. We dont know the exact reason.

Is it because they are facing problems in their own market

Japanese construction companies are busy in the domestic market with the Tokyo Olympics scheduled for 2020. The second reason is, business behaviour and practice are different in Japan and India, not to say one is better than the other. For goods manufacturers, it is about producing and selling products. But construction is different as it needs local partnerships, local labour etc.

Do you think India is adopting the right growth model, especially for large infrastructure projects

The direction of growth in India is quite reasonable. The difficulty here is the general speed of implementation. Infrastructure projects tend to get carried over from one five-year plan to another. But the Indian government is trying to streamline the process.