IIFCL shortlists consultant for take-out financing

India Infrastructure Finance Company Ltd (IIFCL), a 100% government entity with core focus on infrastructure development, has shortlisted a consultant to come out with a report on how to go ahead with its proposal to launch take-out financing scheme, as mooted by Union finance minister Pranab Mukherjee in his recent budget speech.

The shortlisted consultant will come out with a detailed report on the pros and cons of the scheme, the risks including stamp duty, pricing, incentives related issues, viability of the scheme, among others.

\"We expect the consultant will submit the report in the next six to eight weeks time,\" said S R Bansal, senior vice-president, IIFCL.

Bansal, who was in Chennai on Friday to address the infrastructure summit organised by the Confederation of Indian Industry (CII), told FE that the company is confident of launching the scheme despite earlier failures of such scheme by IDFC/SBI (SBIN.NS : 2242.9 -11.75) and later IDBI and LIC a few years back.

One of the major issues which come in the way will be that of stamp duty of 2.75%, which needs to be addressed. There are other risks such as pricing, legal issues, risk weightage, contractual incentives, among others. \"We hope the consultant will address all the issues related to the scheme and come out with a comprehensive report,\" he said.

Based on the report, the company will hold parleys with the RBI, banks, Indian Banks\' Association and all stakeholders, seeking their suggestions or feedback and send it across with all modifications to the ministry concerned before launching the same, he said.

According to sources, \'take-out financing\' is an accepted international practice of releasing long-term funds for financing infrastructure projects.