Projects worth Rs 18 lakh cr await resolution from Project Monitoring Group

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Mumbai | Published: November 24, 2014 8:20:53 AM

Unresolved projects include 110 coal projects, Rs 12,000 cr Delhi Aerocity project, Rs 22,587 cr Essar Steel complex in Orissa.

Bankers said an early resolution of issues related to stalled projects will boost investments and lead to a rise in bank credit offtake. (Reuters)Bankers said an early resolution of issues related to stalled projects will boost investments and lead to a rise in bank credit offtake. (Reuters)

The government has managed to kick-start a little more than 27 per cent stalled projects, despite its efforts and the formation of committees, which shows that the road to revival of mega projects remains a steep uphill climb.

As many as 557 projects having investment of Rs 25,35,288 crore have been reported with the Project Monitoring Group (PMG) for resolution of issues pending with various ministries and departments as on November 17.

“Out of these 557 projects all regulatory and supervisory issues have been resolved in respect of 186 projects having an outlay of Rs 6,88,022 crore. A total of 371 projects involving an investment of Rs 18,47,266 crore are pending for resolution with PMG,” said a finance ministry note to public sector banks. The issue of stalled projects was brought up by the finance ministry during its review of the performance of public sector banks on October 20.

During the UPA government’s term, the Cabinet Committee on Investment (CCI) was formed in January 2013, to place pending projects in the infrastructure and manufacturing sectors on the fast track. In addition, the PMG was set up within the Cabinet Secretariat to monitor stalled projects and resolve hurdles to their roll out.

For public sector banks which reported bad loans of Rs 2,43,043 crore, or 5.32 per cent of gross loan advances, the magnitude of the funding requirement would pose a challenge.

Among the stalled projects, the biggest by investment size is the Gift City project in Gujarat, the home state of Prime Minister Narendra Modi, at Rs 78,000 crore.

The finance ministry note has details of over 90 unresolved power projects which envisage investments of over Rs 5,41,000 crore.

There are 110 coal projects in the list of unresolved projects which encountered legal issues. Other projects on the list are the Rs 12,000-crore Delhi Aerocity project, the Rs 22,587-crore Essar Steel complex in Orissa, Raigarh expansion project worth Rs 42,345 crore and Sterlite Energy’s Rs 12,000-crore project.

Bankers said an early resolution of issues related to stalled projects will boost investments and lead to a rise in bank credit offtake.

“Environmental and land issues  have stalled many projects. There are sectoral issues involving power and coal projects,” said a senior banker.
According to the note, the finance ministry had piloted 47 projects, which were considered by CCI on three occasions in 2013.

“47 projects have been monitored by different ministries and departments. The Cabinet Committee on Investment issued appropriate directions in respect of 19 of these projects, took note of 27 projects and decided on ‘no action’ in one project. Out of these, all regulatory and supervisory issues in respect of 21 projects involving an investment of Rs 80,662 crore have been fully resolved. The other projects are at various stages of resolution and compliance,” the document said.

During the period of January to September 2014, public sector banks have received 194 new projects and proposals (with investment of Rs 250 crore and above in each project) in sectors like power, cement, real estate, road, automobile, oil etc.

The total investment in these projects is Rs 4,68,665 crore. However, the amount sanctioned by banks in these projects is Rs 60,572 and the amount disbursed is Rs 11,107 crore.

Waiting for nod

* GIFT CITY, Gujarat, with investment of Rs 78,000 crore
* CHEYYUR UMPP, Tamil Nadu with a project cost of Rs 25,000 crore
* Orissa UMPP, project cost of Rs 24,000 crore
* Tata Sasol coal to liquid project of Rs 60,000 crore in Orissa
* Bhushan Steel project in Orissa worth Rs 30,000 crore
* Posco Steel project in Orissa worth Rs 52,813 crore
* Dolvi Steel plant in Maharashtra worth Rs 20,000 crore

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