Date:26/09/2008 URL: http://www.thehindubusinessline.com/2008/09/26/stories/2008092651480300.htm

Back Move to relax ECB cap ‘positive’

Hyderabad, Sept. 25

The increase in upper limit in external commercial borrowing will help infrastructure companies to source long term funds from global financial investors, said Mr Y.D. Murthy, Vice-President (Finance) of Nagarjuna Construction Company (NCC). With long term funding drying up in the country this step is positive. However, the interest rate of 7.5 per cent in dollar rate along with cost of hedging will push up the rate to 11 per cent for these funds, Mr Murthy said. Despite t his, infrastructure companies will find it attractive as it would be cheaper than domestic loans which are between 11.5-12 per cent and climbing, he added. Another advantage would be that infrastructure companies would be able to declare speedy financial closure for BOT (Build, Operate, Transfer) and BOOT (Build, own, operate and transfer) projects in roads, ports etc, Mr Murthy said. —

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