Changes needed to implement infra projects faster: L&T CFO | The Financial Express

Changes needed to implement infra projects faster: L&T CFO

Raman said the pace at which the disputes are resolved is also not fast or transparent enough.

Changes needed to implement infra projects faster: L&T CFO
In many cases, sponsors of infrastructure projects require pre-clearances, which is a big risk, after the work gets started.

There is a need to make some structural changes so as to facilitate smoother and faster implementation of infrastructure projects and avoid loss of private capital, R Shankar Raman, chief financial officer of Larsen & Toubro, said. For projects to be completed faster, changes such as pre-clearances, equal distribution of risks in cases where there is collaboration between private and public companies and quicker dispute resolution are needed, he said at the 9th SBI Banking and Economics Conclave.

In many cases, sponsors of infrastructure projects require pre-clearances, which is a big risk, after the work gets started. If pre-clearances are given beforehand, the capital will find its way, Raman said. Where contracts are awarded to a private player in partnership with the government or any of the agencies, there is disproportionate distribution of risks and the bureaucracy needs to own up the risks as well, he said.

Raman said the pace at which the disputes are resolved is also not fast or transparent enough. There are cases where the sanctity of the written contract is questioned, he said, adding that this leads to loss of value of private capital.

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The government is looking to push growth through inclusivity, productivity and sustainability, Raman said. It is necessary to ensure that there is optimum use of resources and that they are productive enough. Similarly, companies need to consider that the capital allocated is done carefully and the project will reach the last mile, he said.  

Seshagiri Rao MVS, joint MD and group CFO of JSW Steel, said while there was demand during the pandemic, the supply is still catching up. However, the capacity utilisation of the manufacturing sector is at a three-year high of 75%, and several companies are announcing capital expansion plans. Other than the domestic market, the government needs to align with the overseas market, especially in the carbon emission space, he said. To support exports, it is essential that carbon emissions are lower and in that regard carbon trading should be simplified to make India more competitive, Rao said.

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First published on: 24-11-2022 at 03:45 IST