NEW DELHI: Prime Minister Manmohan Singh's drive to revive investor sentiment by fast-tracking large stalled projects through the Cabinet Committee on Investments (CCI) and a special cell under it is encouraging Indian companies as well as big foreign investors such as Shell, Cairn India and Dell to knock on the government's door for urgent help.
Over 250 projects worth Rs 11 lakh crore are now being considered by the PM-backed cell, more than double the 120 cases worth Rs 5 lakh crore it started with in July. The Aditya Birla group, Shell, Vedanta, GMR Cairn India, Essar, Jaypee, Reliance Power and ITC are among the many corporates seeking to free big-ticket investments tangled in red tape, and see hope in this mechanism. They are turning to the special investment acceleration cell set up by the PM for interventions to resurrect their investments, enthused by CCI having already resolved issues holding up projects worth Rs 1.4 lakh crore through this mechanism.
"Projects seeking salvation are now coming in thick and fast. Over the last two weeks, corporate India has submitted four-five projects to the special cell on a daily basis as they see it as a ray of hope for their stuttering investment plans," said a senior government official.
This indicates that the scale of stalled plans plaguing investors is much larger than earlier envisaged by the government. When the special cell was mooted in June, Finance Minister P Chidambaram had said it will try and unlock investments worth over Rs 7 lakh crore by reviving 215 projects that have hit implementation roadblocks. The minister had referred to 341 projects worth Rs 10.5 lakh crore that were stuck across India.
The special cell's workload, in terms of investments at stake, has already crossed that figure. According to an ET analysis of the projects seeking expeditious resolution from CCI, the power and steel sectors account for the largest chunk of stalled projects in terms of value. Investors in 64 power projects worth nearly Rs 4.28 lakh crore have sought help in matters such as land acquisition, environment and forest clearances, and most critically, fuel supplies. Overall, the power ministry is dealing with 122 large power projects that are caught up in procedural and other issues.
The Planning Commission has asked the power ministry to take more such projects to CCI's special cell for the resolution of problems. In the steel sector, 23 projects worth over Rs 2.74 lakh crore, including three large projects by Essar Steel , JSPL and JSW Steel, which together account for Rs 1.05 lakh crore, have sought intervention.
Cairn India leads the pack of 27 oil and gas investors that have sought speedy clearances for investments worth Rs 1.13 lakh crore. It has sought to highlight the "national interest" aspect of its Rs 28,000-crore investment plan in Rajasthan. "This world-class asset (the Rajasthan block) has the potential to support 300,000 barrels of production per day, which would comprise nearly 35 per cent of the current domestic crude oil production.
Consequently, it will add about Rs 30,000 crore to government revenues and reduce our nation's oil import bill by about Rs 57,000 crore every year," the company has told the cabinet secretariat, adding that 80 per cent of the value the block that Cairn is developing with ONGC will generate "accrues to government stakeholders".
Several large special economic zones such as the Navi Mumbai
SEZ and Indiabulls SEZ have also sought CCI help. Mumbai airport has sought the committee's assistance in expediting its Rs 12,000-crore investment plan to develop a new terminal and buildings.
Last week, industry body Assocham said 43 per cent of all investment projects worth Rs 52 lakh crore remained nonstarters as of March 2013. Over 34 per cent of these investments haven't moved after being announced, the industry chamber said.
Source : economictimes.indiatimes.com