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Infra projects slow down on cash crunch, labour shortage

21 Jan 2011 Evaluate

Builders of roads and bridges are finding it difficult to raise money and source raw materials to complete the structures, resulting in a slowdown in the pace of infrastructure building. Deferment of projects by government departments, reluctance of investors to put in money and shortage of workers are some of the factors contributing towards the slowdown in core sector works.

L&T, which has the largest order book among the three companies and where infrastructure accounted for 32% of the total orders in the December quarter, said projects have been postponed. Orders worth more than 50,000 crore have been pushed back by various government departments and private firms due to delays in acquiring land and in arranging financial closures. Many of these projects are in the power transmission and transportation sectors.

Since most projects require large tracts of land and companies are unable to get people to part with their holdings, many have remained on the backburner. Disputes over valuations for land parcels are the main reason for the non-closure of land deals.

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