FICCI's infrastructure summit in New Delhi, marked by large participation from all sectors, did not witness remarkable announcements, but for the reiteration that infrastructure is likely to miss the 11th Plan target by more than 10 percent. A report.How do we make banks' infrastructure lending more long term with less mismatches? Well, create solutions outside bbanks, says Planning Commission's high profile Deputy Chairman Montek Singh Ahluwalia. Inaugurating the India Infrastructure Summit 2011: Achieving the Trillion Dollar Dream organised by FICCI, Ahluwalia said banks are not typically designed to lend long term, and so the need is to create more funds on the lines of the much discussed $10 billion India Infrastructure Fund. "The $10 billion fund won't be just a one-off," he said, "but more like a pilot, where the guidelines will first be put in place for this fund. At least two more such funds should be established to start off in the next fiscal year."Nearly 50 percent of the spending on infrastructure would have to come from the private sector in the 12th Plan. "While public sector investment would increase in absolute terms during the five year period," Ahluwalia said, "it would essentially be channelled [for public expenditure] in areas such as rural roads and railways to improve transport connectivity to the remote parts of the country."The Planning Commission is undertaking detailed exercises to sort out issues related to land acquisition, environmental and forest clearances and inter sectoral linkages.Ahluwalia said these will be part of the operational details currently being worked upon and would be built into the final plan document that will be ready by the end of the current financial year.Open up to public scrutiny: Ahluwalia feared, though, that India may miss the $500 billion target for infrastructure investment in the 11th Five Year Plan ending 2012. "I would not be surprised if it is 10 percent or even 12 percent short," he said. Private players have the responsibility of honouring their assurance of performance so as to prevent overruns but also to ensure public good, he added. Just as public scrutiny of privately handled portions of PPP projects should not be excessive, and better upfront definitions and terms of service delivery must be put in place, which can reduce time lags in projects, "It should be logical to open the private sector projects to government scrutiny in terms of assessing the performance parameters." Planning Commission member BK Chaturvedi echoed the sentiment and reiterated that bidding and not delivering is a "disservice to the company and to the nation". Offline, Chaturvedi expanded that there was no reason to believe that the recent premium bidding in highways was excessively aggressive, as the bidding companies in PPP are large and experienced enough to know what they are in for, so long as the process is transparent. Referring to the recent headlines stating that the National Highways Authority of India (NHAI) would be receiving a bonanza of nearly Rs 77,000 crore in Negative Viability Gap Funding (VGF) or Premium, he told Infrastructure Today that the astronomical premium bids in highways recently only reflect a sign of the private sector's assessment of growth over the next few decades. He pointed out that government estimates of traffic growth in highways only includes five percent per year, but this figure, which bidders have gone well over, may be too conservative to be realistic.Off-track: Over the next five years India is likely to hike spend on creating ports, power and pipelines infrastructure. However, there are concerns in regards to the implementation of projects, Chaturvedi said. Private participation in several sectors has not matched what the Planning Commission envisaged, he said, citing the much-spotlighted example of the railway sector, where, although Rs 80,000 crore is being invested in the Dedicated Freight Corridors (DFCs) alone, only about four percent of the value of the ongoing railway projects is under PPP. Comparing India's railway development with China's, he said: "China has expanded massively in the recent past. There is a need for expansion of our networks and their quality, including faster movement of larger freight trains up to 30 tonne capacity." On ports, which Chaturvedi cited as the other slow mover, he said the expansion we are witnessing is mostly because of the private sector initiatives."To facilitate [the all-round growth as planned], a balanced view on land acquisition is critical," Chaturvedi said. "The Planning Commission has taken states onboard now to discuss this." Business session: Speaking at the Session on 'Policy and Regulatory framework for PPP', K Mohandas, Secretary, Union Ministry of Shipping , said there is a clear consensus that the PPP is the most effective model of funding. He said that, in the current year the ministry has already identified 23 projects with an investment of Rs 16,700 crore with a capacity of 232 million tonne. Further, he expected the ministry to come out with the Coastal Shipping Policy in the next two months.Speaking in the same session, BN Puri, Member Secretary of the government's National Transport Development Policy Committee, stated that at present the country does not have a viable transport policy and the existing one was outmoded and out of tune for the requirements of a modern economy. The transport policy framework, he said, would delve into all aspects of the implementation mechanism.SK Goel, Chairman and MD, IIFCL, in the session on 'Financing Infrastructure', said that his organisation is aware of the gap in the infrastructure finance deficit and the need to look at the alternative sources other than commercial banks. He informed that IIFCL is focusing on the deepening of the bond market and proposes to focus on credit enhancing.Panels at business sessions through the day reviewed institutional and policy framework and analysed issues and challenges for private developers, reviewed viable investment and partnership models in infra finance, and provided case studies of mega infrastructure projects such as DFC, Transshipment Terminals, modernisation of India's airports and the "20 km challenge" in road building. Significantly, there was no mention of private participation in urban infrastructure, where private sector has been cautious because of magnified land and viability issues.A report jointly prepared by FICCI and McKinsey released at the Summit proposes that the trillion dollar dream can be realised if challenges are addressed head on by policymakers and infrastructure providers at the pretendering, project execution, and financing stages of infrastructure delivery. The second report jointly prepared by FICCI and Yes Bank on infrastructure financing recommends a 12-point package of measures that will help reduce the risks for investors and assure adequate returns through the creation of appropriatefinancial instruments.