— Atul Tantia, Executive Director, GPT Infraprojects Ltd

GPT Infraprojects Ltd, the flagship of GPT Group of Kolkata, is involved in civil infrastructure projects for railways, roads, airports, and urban infrastructure. Atul Tantia, in an interaction with Sandeep Menezes, talks about the growing scale of infrastructure development in India—and what it means for his company in the coming years.

What are the main challenges in implementing infrastructure development projects in India?
The main challenges are availability of trained manpower in terms of engineers and administrative people. In cases of BOT-type contracts, the challenge is land acquisition. The challenges also relate to rising interest cost currently faced. Due to this the bottom line of many companies is getting hit.

Tell us about the extent of trained manpower shortage and your company's initiatives to impart training.
It is very difficult to get trained manpower, be it welders, fitters or foremen. There are very few qualified people available from ITIs in the market. On our part, we train our engineers and mechanical staff wherein we organise training programmes and invite faculty from top consultants in Kolkata.

This is important for new staff because there is a lot of mismatch between what is taught at universities and required practical knowledge; the practical knowledge of people coming out of universities is minimal.

You said earlier that rising interest rates were hurting infrastructure development companies. Besides, long-term funding is another concern for infrastructure developers.
We actually need a good corporate bond market. This is because currently a good corporate bond market does not exist in India. All the term loans today are PLR and base rate linked. You don't have a scenario wherein you can hedge the Libor or you can hedge Libor for six to nine months; you can't hedge for long term. Six to nine months is actually nothing because there are many long gestation projects.

The government proposes to develop Expressway Authority of India for implementing expressway projects of 18,637 km in phases till 2022.
The policies have to be done by the government and industry can only give its recommendations in terms of proper ideas and land acquisition to be done. The micro and macro polices have to be decided by the government.

India's 3.3 million km long road network is the second longest worldwide. However, the share of expressways and highways is only around 2 per cent.
These days the contracts are on BOT basis wherein the initiative is with the EPC contractor; therefore quality will always be maintained.

Going forward, do you think BOT is the right path for road and highway projects?
There has to be a right mix between BOT and EPC. Some of the projects may not be economically viable; there might be a need for viability gap funding. Therefore, BOT may not be the right way for all projects; it has to be a right mix between BOT and EPC. Otherwise people will have to pay toll for every kilometre that they travel which may not be desirable. There has to be some freeways and some tollways, and people should have the option of choosing between both.

People who want to pay toll should get a better road and value-formoney while people using normal roads must not be made to pay.

What is GPT's long-term strategy?
We aim to be a leading infrastructure catalyst and provider in the country and international market. We are mainly into railways and want to develop that niche in railway projects. The railway segment has always been our focus and we have never lost that focus.

Going forward, the main infrastructure sectors contributing to our revenues will mainly depend on the prevailing government policies.