Budget Reactions: L&T CFO sees good demand for 3000km of new roads
R Shankar Raman, chief financial officer of L&T, believes that there will be good demand for the 3,000 kilometer of new roads proposed by the Finance Minister in the Union Budget 2013-2014.
March 01, 2013 / 11:58 IST
R Shankar Raman, chief financial officer of L&T, believes that there will be good demand for the 3,000 kilometer of new roads proposed by the Finance Minister in the Union Budget 2013-2014.
In an interview to CNBC-TV18, Raman said “I think from where we were in FY12, 3,000 kilometers is welcome and the companies interested will lap it up. But the challenge always has been to convert some of these targets into implemental plans.”He further added that the investment allowance provided to infrastructure firms will help improve sentiment, but that by itself might not set fire to the capex cycle.Below is an edited transcript of his interview with Latha Venkatesh.Q: What have you made of that investment allowance? Is that even a small incentive for capex to start and is there anything else that would make people go out and invest?A: Under the circumstances that the Finance Minister finds himself in, he has tried to give some and take some. From a sentiment point of view it is a right move and it was in some way expected. I am not very sure at the moment as to whether this by itself will set fire to the investment scenario, but definitely it is a step that will encourage people to look at investments, particularly those plans that have been cleared and are waiting for the right timing. Of course there are a few other things in terms of intent that has been expressed and we will have to wait and watch as to how the roadmap develops for these. There is going to be public-private partnership in coal sector, setting up of new ports, the food infrastructure distribution schemes, all of which are investment heavy schemes. Also the Mumbai-Delhi corridor, Bangalore-Chennai corridor, Mumbai-Bangalore corridor will come. So in terms of programs and intent, I think the FM has got some of these on priority, but I still do not know where the money is going to flow from.Q: What is your sense about whether the 3,000 kilometers of roads that the FM has promised to be tendered in the first six months?A: I think from where we were in FY12, 3,000 kilometers is welcome and the companies interested will lap it up. But the challenge always has been to convert some of these targets into implemental plans. After some tough situations we are talking about a road regulator now to resolve some of the long-pending disputes. So this is something that has to work in tandem. But I do not think that is a patch on what we wanted to do at the rate of possibly 12,000-15,000 kilometers per annum. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
