Finmin to help infra firms achieve financial closures

In a bid to fast-track stalled infrastructure projects, the finance ministry has assured help to infra companies in achieving financial closures through banks.

Seeks status report on stalled projects from various ministries

In a bid to fast-track stalled infrastructure projects, the finance ministry has assured help to infra companies in achieving financial closures through banks. The ministry has also sought the status report on projects that have not been implemented from various infrastructure ministries.

Department of Economic Affairs (DEA) secretary Arvind Mayaram has written to various secretaries, including roads, highways and transport, shipping and ports, petroleum, oil and gas, power and coal, asking for details of the projects that are stuck. Mayaram and department of financial services secretary DK Mittal held a meeting with the secretaries last Friday to examine the progress on various projects. The government is keen to remove obstacles that are hampering the execution of projects in the infra sector, sources said.

In his first media briefing on August 6, finance minister P Chidambaram said the government would work to get major infrastructure projects moving.

?In the roads and highways sector, 18 projects are stuck due to a delay in the financial closure, 39 projects are awaiting environment and forest clearance, six are on hold because of delay in wildlife clearances,? said a senior government official. Besides, there are over 30 projects above R1,000 crore that have been already awarded, but not executed so far.

The delay is not only in roads and highways. Public-private-partnership (PPP) projects of major ports are held up as well for want of multiple clearances at various levels ? from the shipping ministry to the PPP appraisal committee and the Cabinet. This issue, according to sources, was also raised in the meeting of the secretaries.

As per official figures, delays in execution of mega infrastructure projects has led to a 36% rise in their costs from the original estimates as on May 31, 2012. The cost overrun of the projects ? 28 power, 36 railway and 84 road ? is pegged at R52,446 crore, taking the total cost from R1,45,271 crore to R1,97,717 crore.

Various petroleum, oil and gas projects are in the pipeline awaiting clearances from Navy, Department of Space and other national defence bodies.

Since a lot of projects are facing delay and are waiting for environment, wildlife and forest approvals, the finance ministry would soon write to the ministry of environment and forest (MoEF) to speed up the process of clearances.

Ministry of roads, highways and transport has already written to the MoEF to relax some old norms for clearances of roads and highways projects.

Suggestions like, de-linking of environment from forest, so that if one clearance is given and the other clearance is not required then, the project should be allowed to skip that particular nod. Also, when a road project is sent for extension from two lane to four lane or from four lane to six lane then, roadside plantations should be allowed to be taken off and should not be seen as an environmental offense. And the threshold for a clearance should be increased from the current 30km in length to at least 100 km.

Against the target of 42 projects valued at R14,500 crore in the ports sector, the government has not been able to award any project in this fiscal so far. The target is three times of what was achieved in the last fiscal. The shipping ministry would soon approach the Cabinet seeking approval to set up two new ports in Andhra Pradesh and West Bengal each. In the aviation sector, the government plans to award three greenfield projects this fiscal in Navi Mumbai, Goa and Kannur.

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First published on: 24-08-2012 at 04:11 IST