CCI clears decks for stranded infra projects

Ministries told to remove barriers within a month

Written by ENS Economic Bureau | New Delhi | Published:August 27, 2013 3:33 am

The government on Monday paved the way for implementation of infrastructure projects entailing an investment of over Rs 1 lakh crore by asking concerned departments to remove the bottlenecks within a month.

The move is aimed at implementing the big ticket projects in power,steel,coal,shipping and ports sector that are currently stranded,and for which,banks have already sanctioned over Rs 4 lakh crore in credit.

Leading the pack are 15 projects in the power sector for,which the Cabinet Committee on Investment (CCI) on Monday had sought that Coal India should sign fuel supply agreements (FSAs) by September 30 with these plants to produce an additional 13,530 MW electricity.

The CCI decided this on a proposal of the department of financial services (DFS).

The CCI,which met under the chairmanship of Prime Minister Manmohan Singh,on Monday also asked the mines ministry to coordinate with the Andhra Pradesh government in ensuring permission for quarrying for L&T’s Metro Rail project in Hyderabad by September 30.

The urgency of the DFS to expedite implementation of the stranded projects is because the banks have already sanctioned Rs 4,82,652 crore out of an estimated need of Rs 11,98,154 crore for 290 projects as on March 31,2013,according to a recent note from the DFS to the CCI.

Worried that these stranded projects can turn into non performing assets (NPAs) that finance minister P Chidambaram held a slew of meetings in Mumbai,Chennai,Bangalore and Kolkata recently to review the fate of these projects.

The DFS had asked CCI to direct the Union environment ministry to accord green clearance by September 30 including Reliance Power’s Sasan project in Madhya Pradesh,Hindalco Industries’ unit in Orissa and another project in Jharkhand entailing a cumulative investment of nearly Rs 42,000 crore.

The DFS had sought the CCI’s approval to grant special economic zone status to Hindalco Industries’ proposed aluminium and aluminium products project in Orissa at an investment of Rs 13,195 crore.

In its note the DFS had argued that big projects in the steel sector are hanging fire because of persistent problems in conversion of land and inadequate allocation of iron ore and coal mines.

TAKE OFF

* Banks have collectively lent to the tune of R4 lakh crore towards 290 projects as on March 31,2013

* The finance ministry fears that these would turn into NPAs if they remained non-starters

* The DFS has also pressed for faster green clearances for power and mine-related projects

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