The Hindu : National : Chidambaram seeks infrastructure proposals

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Friday, Jan 06, 2006

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National

Chidambaram seeks infrastructure proposals

Special Correspondent

Central Government committed to alleviating poverty: Finance Minister

P. Chidambaram

NEW DELHI: Finance Minister P. Chidambaram on Thursday asked States and Union Territories to derive maximum benefit from the various initiatives of the Centre for development of infrastructure.

In a letter to Chief Ministers, he sought project proposals, including from entrepreneurs, while noting that the Centre's initiatives would be successful only if the States provided active support and used the facilities.

The Finance Minister said the Centre was committed to achieving a high growth rate to alleviate poverty, increase employment and improve the quality of life of the people. Since infrastructure such as telecom, power, highways, ports and airports was critical, the Centre had taken several initiatives for this.

Mr. Chidambaram said he had made a provision of Rs. 1,500 crore for funding infrastructure projects in the current year. To encourage the flow of private capital into infrastructure, the Centre, he said, had decided to encourage public-private-partnership (PPP) projects. Under these, the private partner would be entrusted with implementation of the project along with the consequent commercial risks. Public support in such projects would include equity participation, grant of rights to charge user fees and subsidies.

To provide long-term credit for infrastructure projects, a non-banking finance company — the India Infrastructure Finance Company Limited (IIFCL) — has been incorporated. To keep the costs low, the Centre would extend guarantees to enable IIFCL to borrow funds for lending at reasonable rates.

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