12. The model reveals that in the case of Tamil Nadu, for instance, SRTCs achieve a high level of physical efficiency and have high Load factors. This performance, however, does not get reflected in the financial performance since price levels are low. Although efficiency levels are found to be high, a uniform tariff for units across the State despite varying sizes and characteristics and low levels of such a tariff as compared to SRTCs in Maharashtra, Karnataka, etc. have resulted in huge losses of these units.
13. High fare levels but low physical efficiency performance have contributed to losses in states like Maharashtra and Gujarat. The model showed that improvement of physical performance to optimal levels could see the emergence of huge surpluses.
14. Thus, this analysis reveals that the Load factor (LF) and a critical fare level are significant influences on the financial performance of a SRTC. Given the emerging liberalised economic framework, SRTCs would need to effectively tackle the problem of low load factors in a variety of ways. In the Indian context, demand for transport services are price inelastic and at times supply induced. Therefore, an appropriate fare strategy alongwith efficiency enhancement is required to set the organisation on a long-term growth path.
C. Railways
15 Budgetary support to the Railways has been decreasing sharply since the 1980s but has increased marginally in the recent past. Accordingly, the share of internal and extra budgetary resources (IEBR) has been rising. In 2000-01, the dependence of the Railways on Union budgetary support was 38 per cent with 32 per cent covered through IEBR and the balance covered by market borrowings whose share went up to 30 per cent. Budgetary support has come down to as low as 20 per cent in recent years.
16. The study notes that market borrowings should be used within prudential limits in financing the resource gap. Increased financing of the railway system through market borrowings can be unsustainable in the long run.
17. Internal resource generation can be enhanced if effective operating policies are adopted. It is necessary to: a) keep loaded wagons moving for longer hours per day, b) reduce the delays in loading, classification, unloading, etc., by imposing a tariff rate per wagon utilised per day rather than tonnage, and c) improve wagon allocation procedures by appropriate scheduling and reduction in empty wagon movements.
18. Given the accumulation of arrears of track renewals, rolling stock replacement and under-investment in line-haul facilities, it is also necessary to recognise that there is a limit to the better utilisation of facilities.
19. Empirical studies have pointed out that operational improvements on the Indian Railways do not get reflected in the same degree of financial improvement primarily because tariffs are not in alignment with the changes in input costs. On the basis of notional adjustments (to take care of changes of input costs), the relationship between operational indicators and financial performance is found to be strong, thereby supporting the case for tariff adjustment commensurate with changes in input costs.
20. Pricing of railway services has been insensitive to changes in the relative advantages of modes (as reflected by elasticities) as is evident from the gradual diversion of high-valued as well as low-valued items from the Railways to the highways. At the same time, the scope for mobilising large-scale internal surpluses by raising tariffs is limited due to proven shift away from the Railways. Consequently, there exist large gaps between costs incurred by the Railways and prices charged by them especially in respect of passenger services.
21. Passenger traffic earned only about 30% of the Railway’s total earnings while freight traffic earned 70%. Thus, the entire social burden of the Railways is almost entirely borne by freight traffic. The freight rates are, therefore, pitched at a level higher than fully distributable costs. Accordingly the average rate per tonne km. is nearly 3.5 times the rate per passenger km. Thus, passenger services are increasingly being underpriced while freight services are overpriced. Consequently, the rail is losing competitiveness vis-a-vis the road transport sector.
22. Accordingly, it is suggested that freight rates should be brought down or at least not raised till the revenue per passenger km. exceeds the revenue per tonne km. There is, thus, definitely a case for raising passenger fares. This may be specifically true for traffic in the second class mail/ express component (mainly longdistance intercity non-suburban). This segment accounted for nearly 50% of the passenger-km. and 55% of the revenue generation. Even a mere 10 paise increase per passenger-km. could result in additional earnings of around Rs.1800 crore. And it is widely believed that there would not be an adverse revenue impact to passenger fare increase (in other words, inelastic demand).
23.
The Expert Group on Railways set up by the Ministry of Railways in 1998 identified that the main cause of the financial problems of the Railways is the absence of adequate productivity increases that are in line with real wages over time. In this context, the Group has recommended, inter-alia, (i) a “High Growth Strategy” that will entail “focussed remunerative investment and corresponding organizational restructuring of the Indian Railways internally and in relationship with government, including corporatisation”; (ii) stop unremunerative investments; and (iii) setting up of the Indian Rail Regulatory Authority to regulate tariffs. The Report of the Group is being examined by the Government.
24. Railway Budgets in the past decade have taken steps towards the much needed rationalisation of the tariff structure especially in regard to freight rates. The Budget, while resisting any across-the-board increase in freight rates, proposes a higher relativity index for upper class travel (except first class AC, where the relativity index has been lowered to make it more competitive vis-à-vis air travel). The minimum fare of passenger travel also goes up marginally from 15 to 16. In other words, there is a policy signal to eventually correct the existing imbalances between freight rates and passenger rates.
25.
A major factor impacting upon the financial performance of the Railways is their social burden. Conceptually, the social burden on the Railways can be categorised into (a) losses on transport of essential commodities; (b) losses on coaching services; (c) losses on uneconomic branch lines; and (d) losses on strategic lines. For the period 1980-93, the magnitude of the social burden is estimated to have ranged between 13 per cent and 20 per cent of the Railway’s gross traffic receipts and 13 per cent to 21 per cent of their total working expenses. Since the onset of economic reforms, the social obligations of Railways have declined, touching 11 per cent of total expenditure. In 2001-02, the social obligation of Railways is estimated at 13.8 per cent of total receipts (14.6 per cent of total expenditure). Studies have shown that if the Railways were relieved of their social burden, they would not have to depend upon budgetary support to finance their Plan outlays. Alternatively, it has been argued that the level of tariffs could have been lower even after meeting the dividend liabilities.
26.
Such losses are covered through cross-subsidisation, via higher freight rates on some commodity groups. While cross-subsidisation is intended to benefit economically weaker sections, in reality, the benefit of subsidy is appropriated by economically well-off segments of society.
27. The Study thus recommends systematic pruning of those subsidized services that will not reach the target groups.
II. Private sector participation in transport infrastructure and services:
A. The International Experience
28. Although private participation can provide immediate access to a
considerable pool of additional funds and private management skills,
it is recognised that it may not necessarily be a panacea for the
problems confronting all infrastructure projects. Accordingly, there
is a need to understand the international experience in respect of
practices, regulations, institutional arrangements and risk
management with a view to devising a framework that is fair,
predictable, satisfactory and, above all, one that delivers services with
greater efficiency.
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34. In India, at the initial stages of road privatisation, around 1995-96, the response of the private sector was lukewarm, primarily because of the absence of ‘concessions’. Notable among the concessions sought was that the land required for the purpose would have to be acquired for the project by the government and handed over to the private firm.
35. With respect to roads where toll financing was feasible, it was suggested that it would be necessary to offer substantial incentives to the private sector since traffic levels to sustain a high-standard network would be too low to ensure attractive financial returns.
36.
The Government has initiated a number of measures and offered a number of financial incentives. These include amendments to the National Highway Act to permit imposition of tolls on existing roads, no compulsion to have a toll-free facility, relaxation of MRTP provisions to enable large firms to enter the sector, acquisition of land for the facility which would be given to the firm on lease for the period of concession, etc. Further, a number of financial incentives have also been announced. As a result, nearly 20 National highway projects have gone on stream on a BOT basis. Of the nearly 10 road projects (others being bridges), two - the Udaipur by-pass and the Thane-Bhivandi by-pass are fully operational while others are at various stages of planning (physical and financial) / construction.
37.
An interesting case is that of the Coimbatore by-pass in respect of which “take-out financing” has been used for the first time in India Such a structure allows lenders to exit from the project loan without really recalling the loan.
38. On the other hand, the Moradabad by-pass is the first project to be promoted by the NHAI on a commercial return basis. The NHAI for the first time has made a foray into the debt market through a Special Purpose Vehicle - the Moradabad Toll Road Company Limited (MTRCL) - which helps it to multiply its leveraging capability. The entire financing is to be done on a limited recourse basis with the only assurance being that a sovereign-owned subsidiary will operate the project. However, the financial restructuring does envisage some comfort to the lenders: the toll revenues are to be credited into an escrow account on which the debtors will have the right of charge. NHAI is expected to divest from MTRCL when it goes into the operation and maintenance phase. This has been recommended in order to create a benchmark in financial markets for future. Such disinvestment either by the private sector BOT operator or by the NHAI also help raise additional resources for such investments.
39.
A problem faced by financial institutions in funding such projects has been that of providing physical asset cover. Most financial institutions either insist on corporate guarantees from the promoters or extend long-term finance only by mortgaging the physical assets of the project. In fact, financial institutions demand a physical asset cover of 1.5 times of the loans extended by them, which is in line with existing term loan conditions. But collaterisation of physical assets is virtually impossible in national highway projects. This is because BOT operators neither have the leasehold nor ownership rights over the land used since the ownership is vested with the government and not the Special Purpose Vehicles set up for the projects. Moreover, mortgaging of physical assets is not necessarily the solution to all the problems nor does it insulate creditors from defaults. In fact, it only provides some comfort in the books of the creditors. This apart, mortgages do not necessarily ensure prompt
repayment of either the principal or the interest amount and the level of comfort is restricted to recovery of dues through the sale or auction of physical assets.
III. Financial System and Transport Financing: Developments and Issues
To obtain an idea of the financial requirements of the transport sector, given the growth rate of GDP and the share of transport sector in the economy, a simulation exercise was conducted. The simulation exercise examined the financing need of the transport sector over the period 2000-01 to 2004-05. The historical simulation estimate financing requirement of the sector based on: (1) growth rate of GDP and (2) share of investment in transport in the GDP. It is estimated that if the growth rate averages 5 per cent and the share of investment in transport in GDP moves upwards gradually by 0.1 per cent per annum, the financing needs that arises from the sector would be placed at Rs.16,372 crore. In the 7 per cent growth scenario, the required investment would be Rs.23,151 crore over the period 2000-01 to 2004-05.
A. Banking Sector
40. The commercial banking sector’s involvement in transport financing could be broadly classified into two groups: (a) Advances to transport operators including those under priority sector lending scheme, and (b) Project financing.
41.
The percentage share of transport sector credit to total outstanding credit by scheduled commercial banks rose sharply but declined gradually from nearly 5.5% in the early eighties to about 1.8% in 1999. A major share of bank credit was accounted for by land transport (90% or more). The major share of credit (70%) has been for heavy commercial vehicles (trucks and buses), with intermediate public transport modes (Taxis and Auto rickshaws) receiving about 13-14% of credit, non-mechanized (land) and water transport modes receiving about 7-8% each. The share of bank credit to transport sector provided at “less than 14 per cent” interest rate has declined sharply from 72 per cent in 1989 to less than 12% in 1999 with 88% of the credit provided in the interest rate range of “14% and above”. Of the outstanding credit to the transport sector, a little more than 7 per cent has been provided under the priority sector schemes.
42.
An important factor contributing to the reduction in bank finance to the sector was the increasing number of default cases. “The rising proportion of non-performing loans has limited the volume of credit that banks can extend to new clients” (World Bank,1990, p.55).
43. Main reasons for the poor recovery included: a) inability of small operators to repay loans; b) willful default due to political influence; c) legal complications; and d) National system of permits which enables a truck operator to operate in number of states. Further, poor recovery varied from State to State. While repayment was found to be satisfactory in States like Rajasthan and Tamil Nadu, where there is an efficient back-up government machinery, in the case of States like Bihar and U.P., the recovery performance was poor. It is strongly felt that the flow of funds from the banks would improve considerably if the recovery mechanism could be made more effective.
Project financing by commercial banks
44. Long-term commitments (either by way of loans or equity
contributions) to infrastructure projects would create a serious
maturity mismatch between the assets and liabilities of these
institutions. This mismatch could be even more precarious in the
absence of efficient and liquid money markets that would otherwise
provide banks with some tools to manage their liquidity and interest
rate risks.
45.
In order to promote and strengthen infrastructure financing, the Reserve Bank of India has liberalised term loans extended by banks for this purpose. Earlier, there were prudential ceilings on the overall exposure that a bank could take on a single infrastructure project which have been liberalised. Each bank is now free to sanction term loans to all projects within the overall ceiling of the prudential exposure norms prescribed by RBI. In April 1999, banks were permitted to sanction term loans to technically feasible, financially viable and bankable projects through four broad modes of financing: (i) financing through funds raised by subordinated debt (Tier II); (ii) entering into take-out financing; (iii) direct financing through rupee term loans, deferred payment guarantees; and (iv) investments in infrastructure bonds issued by project promoters and financial institutions.
46. Take-out Financing mechanism, though in its nascent stage in India, provides opportunities to the commercial banks to create long term assets from short term liabilities. The participation of a long-term player is crucial in this mechanism. After a specified period of time, the long-term asset is transferred to the books of the long-term financial institution. Take-out financing can be done through number of routes:
a)
where the risk is borne by the primary lender and the liquidity support is given by the long term financial institutions ;
b)
where the risk is fully taken over by the term lending institutions; and
c)
a blend of the both, (a) and (b) above.
B. Non-Bank Finance Companies
47. It is felt that the commercial banking system was very rigid its
approach in respect of financing transport operators which often
resulted in considerable delays in processing loan applications. The
financing of transport operators through NBFCs is an emerging route.In view of the large numbers of individual borrowers, management efficiency considerations suggest that creditworthy NBFCs should act as intermediaries in the entire process.
48.
In other words, banks could play the role of “Wholesale financing/ banking” while the NBFCs could play the role of “retail financing/ banking”. Some of the major players in the NBFC segment have, over the years, developed a special expertise in evaluating credit worthiness of potential borrowers (especially in truck financing) which is supported by an effective delivery system, in turn, backed up by an effective recovery management system which operates on the basis of a large retail network. This has occurred because many of NBFCs have focussed exclusively on commercial vehicle operators. From the demand side, it appears that operators prefer NBFCs to banks for a variety of reasons ranging from the attention they get for individual needs such as design of customer-oriented funding options to flexibility in recovery such as restructuring of payments in the case of genuine financial difficulties.
49.
At the same time, there is a need to increase bank support to NBFCs in the near future, mainly because:
• It will provide substantial relief to transport financiers (NBFCs)
which have been facing a severe resource crunch following
restrictions on the mobilisation of public deposits. Banks look
upon NBFCs as their competitors in terms of both deposit
mobilisation and credit expansion.
• The classification of bank support to NBFCs under priority sector
lending will enable banks to fulfill their targets under the scheme,
which would also be based on a satisfactory recovery mechanism.
C. Financial Institutions
50. All India financial institutions, including, IDBI, IFCI, ICICI, SIDBI
and IIBI play a crucial role in providing infrastructure finance. They
alongwith State Industrial Development Corporations provide long term finance to transport sector. Furthermore, the Infrastructure Development Finance Company (IDFC) was set up as a specialized intermediary to address the needs of the infrastructure sector and to facilitate the flow of private finance to commercially viable projects. The role of IDFC is crucial in transport financing in terms of (a) mitigating commercial and structural risk of transport projects and (b) designing innovative products. The Union Budget for 2002-03 entrusted additional responsibilities on the IDFC by creating an Infrastructure Equity Fund of Rs.1000 crore which would be structured and managed by IDFC and by requiring the company to play a coordinating role for debt financing by major financial institutions and banks for infrastructure projects larger than Rs.250 crore.
D. Bond and Equity Financing
51. In East Asian economies, although government bonds continue to be the predominant mode for infrastructure financing, the move towards privatisation of infrastructure services and new investment by the private sector has not only reduced the need for government bond financing but has also facilitated and accelerated the pace of corporate issues and the development of corporate bond markets. Two features that stand out in regard to the development of the debt market in developing countries in recent years. (i) availability of contractual savings for infrastructure financing; and (ii) divestment of public enterprises and role of existing enterprises in mobilising long-term debt.
52.In India, since the Malhotra Committee recommendations, there has been progressive liberalization of investment norms of contractual savings instruments. This opens up supply of funds for transport sector, among other long term investment areas. The demand for such investible funds can come from (a) growth of private sector and (b) disinvestment of public sector enterprises in the transport sector (through bond issues by such PSEs).
53. The disinvestment process is poised to pick up. The Economic Survey
2001-02 indicated that disinvestment in respect of Public Sector Units
like Air India, Indian Airlines, Shipping Corporation of India is on
the cards. Furthermore, the recommendations of the Disinvestment
Commission in its Report submitted in January 2002, included those
in respect of the Rail India Technical and Economic Services Limited
(RITES).
E. Debt Market and Infrastructure Financing
54. A well-developed debt market with a diversified investor base helps
the commercial banks to manage their asset-liability mismatches.
The development of bond markets facilitates the development of
derivative products such as credit derivatives to hedge against credit
risk. A deep liquid debt market ensures setting up benchmarks and
helps the price discovery process. It also ensures the unbundling of
credit risks, interest rate risk and liquidity risk. Major steps towards
development of the debt market include: (i) developing a system of
primary dealers in the government securities market; (ii) introduction
of liquidity adjustment facility (LAF) to address temporary liquidity
mismatches of financial institutions and also to provide interest rates
segment to the market; and (iii) investment norms for contractual
saving institutions were liberalized to promote a more proactive role
of debt market towards infrastructure financing.
F. Role of Guarantees
55. Contingent Liabilities (such as guarantees) perform a crucial role in
the mitigation of risks to long term funding of transport projects.
Project sponsors typically insist on government guarantees to bring
in funds for road sector projects. Financial institutions, Banks and
NABARD insist on guarantees while investing in infrastructure
projects to contain default risk. Such guarantees are given by
respective State Governments. The insistence on guarantees for
project finance increases the fiscal risk of State Governments in India. The reliance on guarantees as a substitute for debt has witnessed a sharp rise since the mid-nineties. Between 1996 and 2000, aggregate guarantees extended to state level entities grew at a rate of 24.1% as compared to 7 per cent between 1992-96. The Executive Committee on State Government Guarantees, RBI, advised institution of statutory administrative ceiling on guarantees and ensuring greater transparency. In 2002, the RBI constituted a working group to assess the fiscal risk of State Government guarantees. The report is yet to be placed in the public domain.
G. Recent Incentives in respect of the Transport Sector
56. (i) A ten year tax holiday was proposed in the Union Budget 2001-02 for core infrastructure activity, including roads and highways; (ii) tax incentives have also been provided in respect of long term project financing for interest income, dividend and to capital gains; (iii) budgetary provisions for roads and railways have been enhanced. An additional Rs.200 crore has been provided in the Union Budget 2002-03 to NHAI for completion of the ‘Golden Quadrilateral’ work. Another Rs.100 crore has been provided to other roads and inter-State importance; and (iv) the Insurance Regulatory Authority of India (IRDA) in April 2001 has further liberalized the investment guidelines for Life Insurance Companies and Pension Funds. The life insurance companies now are required to invest not less than 15% of their funds to the infrastructure and social sector while the general insurance companies and pension funds will have to invest a minimum of 10 per cent of its investments for infrastructure and social sectors. Such investment proposals will enhance the flow of investments to the infrastructure sector.
IV. Policy Suggestions
(A) From the point of view of an analysis of the resource gap being a reflection of the inefficiency of service delivery from existing transport infrastructural facilities provided mostly by the public sector within an inadequate policy framework and the recognition that the public sector has a relevant, explicit but focussed role to play in direct infrastructure and service provision, the following observations are in order:
1.
Pricing and cost recovery policies in the past have often not taken account of the fiscal effects and the cost of public funds. There have, thus, been major adverse effects of distorted pricing on resource allocation, operational and managerial standards of infrastructure services and the environment Thus, setting user charges to economically efficient levels should be an important element of an infrastructure financing strategy. This has to be true not only with respect to services provided by the railways and road transport (the major modes) but also in regard to roads in which case though user taxes do represent genuine user prices to a large extent, many governments have never seen it fit to set these taxes in accordance with accepted public utility pricing principles.
2.
Besides an appropriate tariff strategy, efficiency enhancement strategies to result in better utilisation of existing infrastructure and services is required to be in place to set public sector organisations like the Indian Railways and State Road transport Corporations on a long-term growth path.
3.
A financing plan based on efficient prices that also provides for equitable coverage would almost always require subsidies to cover total costs. The traditional method of cross-subsidisation made possible by a mark-up over marginal costs must be abandoned in favour of explicit subsidies. In the case of the railways as well as public sector road transport services, there is a need for systematic pruning of those subsidised services that do not reach the target groups.
4.
Moreover, the strategy should be one that alters direction of the use of the system of user charges which is currently devoted mostly to (at least supposed to) funding investment to a system that emphasises maintenance and also controls levels of service usage. This is especially required for road (highway) infrastructure which is most complex in terms of high network implications and accordingly implies a complex maintenance function which requires an effective maintenance strategy. A strategy of earmarking for the roads sector is recommended since the most attractive feature of such a scheme is to link the volume and quality of services (as reflected by operating costs) and the user charges (willingness to pay) with a view to ensure adequate allocation of resources to a low profile economic activity with particularly high rates of return. A basic pre-requisite would be an efficient Road administration under a Road Board which can pursue a genuine purchasing agency approach towards an efficient means of road provision and maintenance. By doing so, the Govt. would be promoting the longer-term process of institutional development.
The above observations, thus, point out the need for a thorough – going reform of policy relating to existing facilities.
(B) From the perspective of additional resource mobilisation to take care of the genuine resource gap and keeping in line with the growing belief in the past two decades or so that the private sector has an increasingly important role to play in the creation of wealth given that the incentive effects of private ownership are important, the following prescriptions are important:
5. Though it is widely recognised that the public sector should retain an important role in infrastructure finance and in the provision of infrastructure services, economic efficiency usually does not require a particular form of intervention. In particular, public ownership, operation and direct financing of infrastructure is often not necessary. Accordingly, in funding infrastructural deficits, it is desirable to draw on market-based financing as much as possible, keeping in view sustainable/prudential norms. These entities can rely on their stable and longer-term revenue profile in issuing debt securities, especially ling-term debt instruments. Such debt instruments helps set important benchmarks for the longer end of the debt market and provide attractive opportunities for contractual saving institutions. This objective may be met by devolving investment responsibilities to autonomous agencies, which are better positioned to gauge users’ investment priorities.
6.
The objective may also be met by turning select investment responsibilities to the private sector under public guidelines, support and regulation. In the sphere of urban transit, competition for the market (via franchising/contracting) rather than competition in the market that needs to be encouraged since that framework appears to be the primary cause of increased efficiency among, for example, bus operators in areas where such deregulatory measures have been attempted.
7.
As user charges become more relevant and sophisticated, it should be easy to promote public-private partnerships which could ultimately depend on user charges alone. To serve as prototypes, merger of revenues from, say, tolling with taxes should provide a secure revenue base which could open up access to new sources of non-conventional funding such as the capital market, external funding, etc. The experience of both developed and developing countries illustrates the requirement of a close relationship between the need and the desire to develop and tap capital and debt markets (domestic and to a lesser extent, international). This process is still very much in its nascent stage in India and should be encouraged by ensuring a healthy balance between investor and user concerns within the framework of an appropriate regulatory framework
8.
Given the experience in developing countries, government guarantees can be expected to efficiently support private infrastructure as an interim measure while the reform process is being set in motion to allow the market to handle the relevant risks. But the Government must consider the expected value of commitments in issuing guarantees. Such valuation of guarantees and other contingent liabilities help in comparing guarantees with cash subsidies. Essentially, valuation enables decisions to be made on the basis of real rather than apparent costs and benefits.
9.The financing mechanism chosen for infrastructure support should encourage greater domestic savings for investment rather than merely divert resources from other investments and the financial saving of the household sector is crucial for additional resource generation for transport financing..
10. The banking sector is a major source of financial savings of the households in the country. The traditional model reveals that the commercial banking sector’s involvement in transport sector financing has been almost exclusively limited to loans given to transport operators. But recoveries being low, flows have been limited. In the presence of an efficient recovery mechanism, the flow of funds from the banks is likely to improve considerably .
11.
Given the strength of adequate funding available with the banking system and the inherent efficient credit delivery and recovery mechanisms of NBFCs especially in regard to truck financing, commercial banks themselves should play the role of “Wholesale financing/banking” while the NBFCs should play the role of “retail financing/banking”.
12. Financing agencies should (over a period of time) insist on viability of operations either as a firm or as an association/evaporative with a viable fleet and requisite infrastructure as a pre-requisite for lending to truck operators.
13.Financial innovations like take-out financing should be encouraged in the context of transport project financing.
14. Contractual savings form one-third of the financial savings of the households in India. Pre-empted use of these funds by the Government (through requirements to invest in Government securities) has been a major impediment to the development of contractual savings as a source of long-term finance. There is a definite need to liberalize investment norms of contractual savings instruments. While such a liberalization of norms represents the sources side from the flow of funds perspective, the demand for such funds needs to be created through a well-planned programme of disinvestment of public sector (especially infrastructure) entities with a view to promote private participation in infrastructure, to reduce budgetary support and management obligation and to promote competition. Such a supply (of) and demand (for) funds can contribute to development of domestic capital market. |
