The recently set-up Cabinet Committee on Investment headed by Prime Minister Manmohan Singh is likely to kickstart operations later this month by coming to the rescue of road sector projects that are witnessing a bitter battle between developers and the National Highways Authority of India (NHAI) over delays in getting statutory clearances.
As many as 39 road projects worth over $ 4.5 billion are stuck due to pending environmental and forest clearances and issues related to land acquisition; in addition, oil exploration projects worth $13 billion are pending approval at various levels.
A senior government official privy to the development told FE that the road ministry is finalising a list of road projects that would soon be sent to the committee for faster decision-making. The ministry is likely to first send a list of around 15 projects worth over R1,000 crore each.
NHAI has moved the Supreme Court seeking delinking of forest and environmental clearance procedures to rescue stuck road projects. Around 20 large road projects are stuck at present, as the ministry of environment and forests is not processing requests for for these projects by taking up environment and forest clearance processes separately. This has already resulted in infrastructure companies, such as GMR and GVK, deciding to walk out of projects. These projects could be referred to the commitee later, after getting directions from the court.
?It would be a good idea to involve a high-level body, such as the Cabinet Committee on Investment, to get more clarity on road sector projects where delays are due to complicated issues pertaining to land acquisition, green clearances and lack of clarity over the model concession agreement,? said the government official. Finance minister P Chidambaram had earlier written to road minister CP Joshi that road projects are not stuck because of problems in getting financial closure, but because of issues such as problems in land acquisition. Faster clearance for road sector projects has gained importance as infrastructural bottlenecks have been identified by a several investors as one of the prime reasons for slow investment flows into India. As per Deloitte Global Manufacturing Competitiveness Index, 2013, based on a survey of CEOs, executives and other officials of 550 global manufacturing companies, infrastructure bottlenecks definitely impact the attractiveness of market among investors.
Among the first set of road projects likely to be vetted by the committee are the Patna-Buxar stretch in Bihar, Jammu-Udhampur stretch in J&K, the Surat-Dahisar stretch and the Gurgaon-Kotputli highway, among others. Most of these stretches have been delayed from their original schedule by three months to more than a year.
In the road sector, the government?s performance leaves a lot to be desired. It lags way behind its target of awarding 8,000 km of roads in the current fiscal. So far, in this fiscal, NHAI has awarded only 705 km, and another 2,700 km is almost ready to be awarded, but successful bidders have been few and far between. This has become a huge concern for the ministry of roads, transport and highways, and NHAI.
To revive investor interest, the ministry of roads and highways has also has put special focus on expediting award of projects that would enjoy 100% government funding. Moreover, stress is being laid on improving the speed of construction. Till end-December, NHAI had built 1,608 km of highways, and it aims to bump it up to around 3,000 km. The ministry, through other state agencies, has built another 1,000 km.
Sources said that the committee could also look at delays in getting clearance for oil exploration projects as the oil and gas ministry is preparing a note for the high- level body seeking faster clearance for about 50 blocks. Work on most of them is stuck, mainly due to delays in clearance from the defence ministry.
The Prime Minister Manmohan Singh-led committee will oversee approvals in sectors such as energy, railways, roads and highways, airports, telecommunications, information technology, irrigation, housing and urban development.
