Chiefs of large state-owned infrastructure firms with combined cash reserves of R1.8 lakh crore on Wednesday promised to make significant investments in the next five years and sought assistance from finance minister P Chidambaram in securing project clearances and fuel linkage.
Heads of SAIL, ONGC, Oil India, NTPC, Coal India, BHEL, MMTC and NMDC discussed their capacity expansion plans with the minister, who sought to identify the problems facing committed investments.
The finance minister is on a drive to return the investment rate to 38% of GDP seen during the boom years half a decade ago. Friday’s meeting comes against the backdrop of a three-year low in economic growth at 5.5% in the June quarter and a marginal contraction in industrial growth in April-July.
NTPC, which is planning to invest R20,000 crore this fiscal and R2 lakh crore over the next five years, said the company apprised the minister of the problems with fuel linkage.
India is facing a shortage of natural gas, while controversies on allocation of mines and regional moratorium on coal mining have affected the fuel supply of many power projects. NTPC CMD Arup Roy Choudhury said he anticipated some direction from the finance minister on fuel linkage for power projects after Wednesday’s meeting.
SAIL chairman CS Verma said the steel major had finalised an investment Rs 45,000 crore for the five years up to 2017. SAIL is exploring the possibility of further raising this planned investment by Rs 10,000 to Rs 15,000 crore.
“We apprised the minister about our capex plans. Our cash and bank balance are more than Rs 6,000 crore. For the current financial year, we have a capex plan of Rs 12,000 crore,” Verma told reporters after the meeting. Due to the huge infrastructure investments projected, SAIL anticipates that the consumption of steel would go up in the coming years. Already, consumption has grown 8.8% in the first five months of the fiscal, justifying a further capacity expansion, he said.
Bhel CMD B Prasada Rao said he has sought the finance minister’s assistance in getting clearances for some projects. “The minister has taken note of the areas where the government