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NHAI-IIEF Policy Roundtable on Financing of Highways
22 and 23 May 2003, Taj Mahal Hotel, New Delhi, India
Day One :
22 May
Opening remarks
Anand Bordia
Member (Finance), National Highways Authority of India
Special Address
Ashoke Joshi
Secretary, Ministry of Road Transport & Highways
Special Address
Santosh Nautial
Chairman, National Highways Authority of India
Inaugural address
Maj. Gen. B.C. Khanduri (Retd.)
Minister of State (Independent Charge) , Ministry of Road Transport & Highways, Government of India
Outline of the Roundtable
Gautam Bhardwaj
Managing Director, Invest India Economic Foundation
Strategies for reducing the cost of financing highways
Nasser Munjee
Managing Director and CEO, IDFC
Questions
Issues in tolling of highways
Session Chairman
Ashoke Joshi
Secretary, Ministry of Road Transport & Highways
Introduction by the chairman
Future potentialities of tolling Indian highways and the international experience: commercial and business issues
Bharti Ramola
Executive Director, PricewaterhouseCoopers
Future potentialities of tolling Indian highways and theinternational experience - legal and regulatory issues
This paper addresses the key legal, regulatory and policy issues in India pertaining to tolling of highways, keeping in mind the existing regulatory framework and experience, and future needs of the road transport sector. The paper examines the structures employed by a few major projects in the Indian road sector in recent past, and attempts to identify the factors behind their success or failure, and the key learnings for the future. In conclusion, the paper proceeds to suggest a broad tolling policy framework inculcating these key learnings, and including elements drawn from a case study of successful models implemented overseas
Hemant Sahai
Senior Partner, J. Sagar Associates
Panel discussion
C.S. Rao , Secretary (Revenue), Ministry of Finance
Lalit Joshi , Member, National Highways Authority of India
Hari Sankaran
Executive Director (Infrastructure), IL&FS
Open discussion / Q&A
Summing up by the chairman
Special address
Policy directions for financing of infrastructure in India
Dr. S. Narayan
Secretary, Department of Economic Affairs,
Ministry of Finance, Government of India
Questions
Policy alternatives for revenue streams to finance highways
Session Chairman
To be confirmed
Introduction by the chairman
Indirect road user charges (oil cess); additional levies on beneficiaries sectors (motor vehicle, tyre) and general taxes
Road sector development has large externalities or spillover effects to non-users. There are distinct backward linkages with other industries such as cement and steel. Employment generation, with all its social and economic ramifications, is also a major fallout of road development. Implementation of the NHDP in India has had just such an impact in recent times. While BOT road projects (annuity and toll) have attracted impressive private capital, collection of cess on petrol and diesel has provided substantial budgetary resources for development of NHDP. This paper discusses some possibilities of widening the scope of indirect taxes, along the lines of motor fuel cess, to other products to augment the available resources.
Dr. Kirit Parikh
Emeritus Professor (Former Director & Vice Chancellor), IGIDR
Samir Chawla
Vice President, SBI Capital Markets
Approach and findings of The World Bank study
CES is carrying out a study on behalf of The World Bank on Highway Financing. The draft report is due towards the end of June, 2003. This study will cover road user charges, user costs, the funding needs for the next 10 years for road development and also look into various financing options for meeting the requirements - with their pros and cons. Dr. Saggar will discuss the approach to the study and the findings from the analysis of data on user costs and charges, which should be useful in considering the options for raising additional finances for highways in India
Dr. R.K. Saggar, CES
Panel discussion
Rajendra Chitale
Managing Partner, M.P. Chitale & Co.
B.N. Puri
Advisor (Transport), Planning Commission
Open discussion / Q&A
Summary and closing remarks by the Chairman
Financing of highways: Country Case-study - Malaysia
Financing of highways - The Malaysia Case-study
Prodyut Dutt
Transport Specialist, Transport & Communications Division
South Asia Department, Asian Development Bank
Questions
Close of technical sessions for day one
Public-Private partnerships in the road sector
Day two:
23 May
Session Chairman
Deepak Dasgupta
Member, Taskforce on Interlinking of Rivers
Ministry of Water Resources
Introduction by the Chairman
Public-Private partnership in the road sector - different financing mechanisms for Indian Highways
In the context of Indian Highways, it is seen that private sector involvement is key to improving efficiency and allowing access to large-scale implementation capacity. Although private sector involvement is desired, given the difficulties associated with financing projects entirely through direct user charges, the road sector will continue to require government support, mainly in the area of collecting user charges and subsequently in ensuring that such funds are efficiently allocated across various projects. Hence, the rationale for public-private partnerships. Against the above backdrop, the paper will seek to examine the overall sustainability of the NHDP by focusing on two critical issues of investor confidence and ensuring effective provision of road services for users. In this context, we will examine different financing mechanisms to identify the model that is best suited for Indian highways.
Sri Kumar Tadimalla , IDFC
Sunaina Kilachand , IDFC
Panel discussion
Anand Bordia , Member (Finance), NHAI
Dr. Pradipto Ghosh , Additional Secretary to Prime Minister, PMO
Dr. Partha Mukhopadhyay , Professor, IIM-Ahmedabad
K Vekatesh , General Manager (Projects Development), L&T
Open discussion / Q&A
Summary and closing remarks by the Chairman
Issues in funding from multilateral agencies
Session Chairman
Santosh Nautiyal
Chairman, National Highways Authority of India
Introduction by the Chairman
Long-term forex scenario and its impact on external loansfor the road sector
A large part of the road sector in India has been financed by external assistance in terms of soft loans either to the Government or directly to the project executors. In case of the loans to the Government, the same funds have been on-lent to the road sector by the Government in INR effectively immunizing the project executors from the currency risks. Given the current market conditions, where there seems to be a paradigm shift in progress on the external value of rupee and the interest rates in the economy, it is pretty uncertain whether the rupee will appreciate or depreciate in the next 3-4 years. There can be equally plausible reasons in support of either view points. In view of such un-certainties, this paper reviews the costs associated with the indirect external loans to the road sector vis-à-vis the cost of a direct external loan on a fully hedged basis or on an un-hedged basis.
Vipul Chandra and Ravi Savur , Citibank N.A.
Multilateral funding: R&R policies, procurement and decision making processes, and financial implications
To be finalized
Panel discussion
Dr. Ajay Shah , Consultant, DEA, Ministry of Finance
Shunso Tsukada , Senior Transport Specialist (South Asia), ADB
Luis Miranda , Chief Executive, IDFC Asset Management
Open discussion / Q&A
Summary and closing remarks by the Chairman
Financial arrangements: Domestic bond issuance
Session Chairperson
Usha Thorat
Executive Director, Reserve Bank of India
Introduction by the Chairperson
Strategies of medium and long term borrowing in the context of interest rate situations
The paper examines the practical aspects of the domestic bond markets and strategies for optimal execution of debt funding for NHAI. In light of NHAI's possible revenue streams, the paper examines the range of choices available to NHAI for domestic bond issuances in various interest rate scenarios. Necessary principles and mechanism for achieving the requisite credit enhancements vis-à-vis nature, stability and sustainability of the revenues (toll, cess etc.) are also included. The strategizing involves possible use of derivatives like options, swaps in optimizing the funding solutions. The debt instruments include various structures depending on the requirements of specific investor segments. The paper also details the necessary steps to achieve an active and liquid secondary market for the debt instruments.
Mohit Batra , Joint General Manager, ICICI Bank Limited
Anil Ladha , Senior Vice President, ICICI Securities
Panel discussion
Subrata Mukherji
Executive Director, ICICI Bank
Nageswara Rao
Managing Director, IDBI Capital
Naresh Takkar
Joint Managing Director, ICRA
Sanjay Tanksale
Senior Vice President - Infrastructure, SBI Capital Markets
Susan Thomas
Assistant Professor, IGIDR
Open discussion / Q&A
Summary and closing remarks by the Chairperson
Close of session
Innovations in corporate finance
Session Chairman
U.K. Sinha
Joint Secretary (CM & Pensions), Ministry of Finance
Introduction by the Chairman
Innovative ideas for corporate finance including securitisation, long-term debt, equity, etc.
This paper discusses the capital-raising record of the Authority, highlights issues concerning the long-term viability of the programs and suggests directions for the future. The role of rating agencies and better disclosures is also addressed. In this context, the paper brings out the over all trends in the corporate debt issuances market and compares it with the Authority's programs. The alternatives of securitization, convertibles and equity are analyzed as potential options for fund raising by the Authority.
Prithvi Haldea
Managing Director, Praxis Consulting & Information
Dr. Praveen Mohanty
India Development Foundation
Panel discussion
Rajendra Chitale
Managing Partner, M.P. Chitale & Co.
R. Krishnamurthy
Managing Director, SBI Life Insurance Co.
Vishakha Mulye
GM and Head Structured Finance, ICICI Bank
Open discussion / Q&A
Summary and closing remarks by the Chairman
Valedictory
Summing up
Anand Bordia , Member (Finance), NHAI
Summing up
Santosh Nautiyal , Chairman, NHAI
Valedictory Address
To be confirmed
Questions / interactive session
Close of Policy Roundtable
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