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Project Appraisal in Infrastructure
Financing by Indian Banks
-- Vikas Srivastava
Infrastructure contributes to economic development both by increasing productivity and by providing
amenities which enhance the quality of life. The Planning Commission has estimated that investment in
infrastructure—defined broadly to include road, rail, air and water transport, electric power, telecommunications, water supply
and irrigation—will need to be of the order of about  14,50,000 cr or US$320 bn during the
11th Five Year Plan period. This is a requirement
of immense magnitude. Not all of this investment can come from public
resources. Reports about the Reserve Bank of India
(RBI) asking banks to take on more exposure in financing
infrastructure projects should prima facie be welcomed. The RBI's move is to garner the surplus in the banking sector and
utilize it for building infrastructure assets. Banks' participation in
infrastructure finance needs is to be preceded by
a strong understanding of the risk return characteristics of the project per
se, as well as of the risk mitigating and risk sharing techniques built into the financing structure. Most of this new investment is structured as
project financing which deviates from traditional corporate
finance. It is imperative, therefore that banks and
financial institutions should have the requisite expertise for appraising
the viability and bankability of projects. In this
regard, the study explains the salient issues of project
appraisal involved in infrastructure financing.
© 2011 IUP. All Rights Reserved.
A Multilevel Analysis on the Economic Impact
of Public Infrastructure and Corruption
in Italian Regions
-- Gianpiero Torrisi
The paper uses data from the Italian regional public
accounts database to investigate and analyze the
heterogeneity of the impact of public infrastructure across Italian
regions, both on institutional and political
grounds. Heterogeneity is addressed by linking the impact of infrastructure on Gross Domestic
Product (GDP) with corruption by using a random coefficient panel data model. This paper considers a novel objective measure of
corruption that consists of the difference between a measure of the physical quantities of public infrastructure and
the cumulative price government pays for public
capital stocks. Empirical analysis confirms the existence of
parameter heterogeneity across Italian regions and is also consistent with
the theoretical considerations that corruption negatively affects economic performance.
© 2011 IUP. All Rights Reserved.
Financing of PPP Infrastructure Projects in
India: Constraints and Recommendations
-- Ranjan Agrawal, Aayushi Gupta and M C Gupta
Infrastructure projects are complex, capital
intensive and with long gestation period, posing multiple and
unique risks to project financiers. Private investment in infrastructure in India over the past decade has not been up
to the expectation, and there is a need for Public-Private Partnerships
(PPPs) to play a much greater role than before. The paper
analyzes the reasons for private financing not making its way
into the different infrastructure segments, and examines
the key constraints to private financing. It also suggests ways to mitigate these constraints for
a sustained private investment in the Indian infrastructure.
© 2011 IUP. All Rights Reserved.
A Study of Urban Transport Crisis of Pune City
-- B L Rajput, A L Agarwal and D Mahajan
Pune city is one of the historical cities and has seen a tremendous growth during the real-estate boom
period 2002-07. Pune has become the educational hub, and also the industrial and tourism developments
during this period were multifold. Due to an burst in population, the city is facing severe urban transport
crisis like traffic congestion, traffic fatalities, air pollution etc. These crises are mainly due to limited
transport infrastructure, rapid sprawl development of suburban areas all around Pune, rapid increase in motor
vehicle ownership, poor public transport services etc. This paper analyzes the extent and cause of most severe
urban transport problems faced by the city and recommends select ways for improvement that would help
to mitigate the above said problems.
© 2011 IUP. All Rights Reserved.
Role of Indigenous Technologies in Urban
Infrastructure Provision: An Evaluation of Cobblestone Roads in
Dire Dawa, Ethiopia
-- Alok Tiwari
Rapid urbanization and population growth in cities of developing countries create a huge demand for
various types of urban infrastructure, while they also produce pressure on the existing infrastructure and cause
its deterioration. In developing countries like Ethiopia, the federal
governments are financially constrained because of various reasons like: rapid urbanization, inadequacy of foreign exchange and a huge demand for
basic infrastructure like roads. The growth of Ethiopian cities presents enormous challenges to the nation.
Although Ethiopia is one of the least urbanized countries in Africa, the CSA Report (2008) says that due to
rapid population growth, 12 million out of 77 million people live in cities.
In fact, the provision of adequate road infrastructure services is essential for the socioeconomic
development of any country. Dire Dawa, the second largest city in the country, is currently facing similar problems
of road infrastructure gaps. In an effort to solve these problems, the city administration has been
undertaking road construction using cobblestones. Cobblestone road projects are one of the indigenous (based on
locally available materials) road construction technologies implemented as an option to other types of
road construction technologies in the city. The objective of the paper is to carry out an assessment on the
challenges and opportunities of cobblestone road construction projects in Dire Dawa. The findings revealed
that cobblestone road construction projects have brought significant socioeconomic benefits and challenges to
the city. To achieve the expected socioeconomic benefits, the city administration and other agencies should
work together to face the challenges.
© 2011 IUP. All Rights Reserved.
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