Mumbai-based IL&FS plans to set up office in Oman by Q3 -
By Conrad Prabhu -
MUSCAT — Infrastructure Leasing & Financial Services Limited (IL&FS), one of India's largest infrastructure development and finance companies, is keenly exploring opportunities for investment in the Sultanate.
According to a high-ranking representative of the Mumbai-based conglomerate, widely recognised as the pioneer of the Public-Private-Partnership concept in India, the Sultanate holds out significant potential for investment in a number of key areas, including roads, port and maritime infrastructure, power and water, waste management, water treatment, and skills-set development, among other sectors.
“We are closely observing Oman as a potential market,” said Mohan Roy, Partner at IL&FS Investment Managers — one of over 250 companies that form part of the well-diversified IL&FS Group. “We are talking to a few partners right now with the goal of forming consortiums with like minded partners to bid for upcoming projects in Oman,” the official said in comments to the Observer.
Roy is currently visiting Oman as part of a 13-member delegation representing the Confederation of Indian Industry (CII), a non-government industry-led organisation that has been playing a proactive role in India’s development process.
IL&FS was set up in 1989 as an initiative of the Government of India to rope in private companies as partners in infrastructure development.
Initial shareholders included banking and financial behemoths including the Central Bank of India and Unit Trust of India, with Life Insurance Corporation (LIC) and State Bank of India (SBI) acquiring stakes later. While 50 per cent of the Group is currently owned by large Indian financial institutions, the balance is held by a number of prominent international investors, including the Abu Dhabi Investment Authority and ORIX Corporation of Japan.
The Group is now looking to expand its footprint overseas, having already made initial forays into the Middle East, South-East Asia and Africa. The Sultanate of Oman is next on the conglomerate’s sights, said Roy, with plans afoot to establish an office here sometime during the next quarter.
IL&FS, according to the official, is keen to leverage its formidable expertise and resources to undertake infrastructure projects in the Sultanate on a Public-Private-Partnership (PPP) basis.
In India, the Group is credited with constructing the country’s first toll road on a PPP basis. It is also behind the first PPP-based water distribution project, as well as a city-wide gas distribution scheme in New Delhi that currently supplies environment-friendly compressed natural gas (CNG) for public and private owned vehicles.
“Over a period of time we have made significant progress on the PPP front, and today we own the largest road company in India managing about 12,000 lane kilometres of roads. In the power sector, we have around 15,000 MW of capacity in different stages of development. We are also a large player in waste management, water treatment, social infrastructure and skill-sets development, the latter being something of potential interest to Oman. We have trained more than 800,000 peo
ple in India in collaboration with the Rural Development Ministry, with employment pegged at 90 per cent.”
Roy singled out the road sector in Oman as particularly promising from the PPP standpoint. “Oman is still not open to PPP in sectors other than power generation. But we still see a lot of potential for PPP in roads, though the question of tolls is perhaps a sensitive topic in Oman. Nevertheless, we have different annuity models that can be applied here. For instance, we will put in our own balance sheet money for roads and collect an annuity from the government over a period of 15 – 20 years. This will free up the government’s own resources for other key infrastructure projects,” he said.
Significantly, IL&FS is also a major player in the financial services sector, said Roy. The Group is the founder of the National Stock Exchange (NSE), while its project lending arm provides finance for infrastructure projects and mid-size corporates in India.
“Over the last 10 years, we have raised around $10 billion in equity for various projects. We are also a large player in the private equity space with around $3.5 billion in assets currently under management across growth capital, real estate and infrastructure.”
The Group is planning to launch a $400 million fund for the Middle East that will also cover projects targeted in the Sultanate. “We will be investing in infrastructure and infrastructure services across Oman, UAE, Saudi Arabia and Qatar. This ILFS sponsored fund will be launched soon,” Roy added.