Ashish Tandon interview: ‘Land acquisition hurdles, financial bodies’ scepticism keeping pvt players at bay’
THE INDIAN EXPRESS
PRANAV MUKUL
May 21, 2018
Managing director of French engineering company Egis’s Indian unit, says that while a delay in projects due to the aforementioned roadblocks may not be a huge problem for the government, it renders the investment unviable for a private party.
Plummeting oil prices over the last four years may have prompted the Centre to ramp up its expenditure on infrastructure but fundamental problems including land acquisition issues, scepticism from financial institutions towards funding projects and lack of skilled enough labour have kept investment from private players at bay, Ashish Tandon, managing director of French engineering company Egis’s Indian unit, tells Pranav Mukul in an interview. He adds that while a delay in projects due to the aforementioned roadblocks may not be a huge problem for the government, it renders the investment unviable for a private party. Excerpts:
What are the key concerns being faced by the infrastructure sector in the country?
80-85 per cent is still from government agencies because private investors are still not coming forward because of the various issues that have been plaguing the industry. But the government is pumping money in to infrastructure. The main issue is that the land acquisition problem is yet to be resolved. People are still sceptical about it. Second is that we do not have enough skilled labour and most of the infrastructure projects get delayed because of these issues. First you don’t get the land and when you get the land the labour is not there. Even financing is becoming an issue today with the amount of NPAs each bank has, they have become very sceptical with financing. It is a logjam situation.
Within infrastructure, what are the sub-segments that are picking up or are lagging behind?
With most government projects, the focus is on areas where land is available like metros, airports, ports, smart cities. But if you see roads, there are hardly any private players left today. Last mile is not getting completed, tolling is becoming an issue. Earlier, people had bid aggressively but it is not viable anymore so they have to restructure their debts since they are not able to service it. Many of the major players are looking to divest their road assets.
But isn’t land an issue for the government-funded projects as well?
If a government project gets delayed by a few years, it doesn’t make much difference to the government as long as it comes. For a private player, even if it gets delayed by six months, the debt will kill him so he needs the land on a yesterday basis. Nothing has changed between the last government and this one as far as land acquisition is concerned. Fortunately for us oil prices were down for the last four years so the government was able to pump money into infrastructure.
Do you see a change in approach of this government vis-à-vis the previous ones?
I would say that thrust on infrastructure began long back with the Vajpayee-government. This government got lucky with the oil prices so it could ramp it up. But if you compare this government with the previous one, even though the functioning of this government may have become cleaner and decision making may have become faster, the GDP growth has not gone to the levels it should go and that is primarily because private participation is not there. Yes, there is ease of doing business and determination to push things through because it’s the need of hour. Earlier, elections were contested on ‘roti, kapda, makaan’ (food, clothing and shelter) and now it’s ‘sadak, paani, bijli’ (roads, water and electricity). Any government who has not been able to provide (the latter) has gone down.
While road projects have been affected due to land constraints, airport developers are slightly more optimistic from the land point of view…
Building an airport is not a problem. You can always get that much land but connecting an airport to the last mile may be an issue. Now, an airport is coming up at Jewar in Uttar Pradesh. The project has been going on for many years but it wasn’t cared for till the Yamuna Expressway became functional. This allows people from Agra, Aligarh, Lucknow to also access the airport. If the airport was build 10 years back without the connectivity, it would have been useless. Before building the airport, it is necessary to build the infrastructure around it. That’s the way it needs to be planned.
What more needs to be done to address the infrastructure issues for the future?
All the master plans need to be revisited. Some of the master plans were made 10-15 years back and population has grown since then. We need to make the changes required because, for example, nobody had thought 20 years back that Sohna Road (in Gurugram) would have developed. People were even sceptical about Gurugram, which has now become costlier than Delhi. Mumbai just got its master plan revisited. The new master plans should take into account, for example, Delhi and the satellite cities around it and have integrated systems for that. Practically speaking, that’s what the smart cities concept should have been, and while it was so earlier, suddenly it was decided that let’s first make brownfield smart cities rather than greenfield smart cities.
You are also involved with the Chhatrapati Shivaji memorial in Mumbai. What is the purpose of such a project for our economy?
A whole island is being developed, which is not just the statue but also with a convention centre, hotels, recreation park, museum and a lot of footfall from foreign tourists will be seen. Even at the Statue of Liberty in New York, most of the people there are tourists. It’s a tourist attraction. Mumbai has some heritage tourist destinations but what is the harm in building something for the next 500 years? This will also help the city generate revenue.
Is it right for the authorities to prioritise the taxpayer’s money on a project like this instead of basic issues like infrastructure, transportation, etc in a city like Mumbai?
Today, unemployment is also a major issue in Mumbai. The memorial will not only generate revenue but will also be self-sustaining while creating many jobs. For example, in business, if there’s a problem you need to address it but you cannot stop focusing on future growth because of that. It goes hand in hand.
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