46 big-ticket projects hit defence roadblocks

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SummaryOf the projects hanging fire, 15 are from Reliance Industries’-led consortium while another 20 are from ONGC.

Not just environmental concerns, defence issues too have ended up blocking big-ticket projects — a total of 46 oil and gas sector projects, cumulatively entailing investments to the tune of Rs 92,000 crore, are stuck with the defence ministry.

A review done by the cabinet secretary’s office has found that these projects, some dating back a decade, are pending because the defence ministry has raised the red flag on them. The review is part of the ongoing clearances within the government to ensure that all projects that are held back by different ministries get going.

Of the projects hanging fire, 15 are from Reliance Industries’-led consortium while another 20 are from ONGC. Others affected (see chart) include those from Cairn India, BHP Billiton and Santos.

The most common reason for the delay is because the defence ministry’s objection to oil exploration platforms. The ministry has claimed that drill ships are permanent structures and therefore security hazards for the Navy or Air Force installations.

A committee of secretaries which met recently has remarked that drill ships are not permanent structures and so the defence ministry should withdraw its observation, case by case. The Cabinet Secretariat has instructed the defence ministry to “decide on the contention of the ministry on petroleum and natural gas within 30 days.” While no date has been given specifying when the 30-day period would begin, the covering letter accompanying the observations is dated December 20, 2012.

The defence ministry spokesperson did not respond to a detailed questionnaire sent by The Indian Express .

An official who attended the December 20 meeting said, “Delays in implementation of these projects are not only pushing up their costs but also putting at risk the capital already invested in them.”

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