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Friday, June 28, 2013

PM foPM for Rs 1.15 lakh cr investment in PPP projects in 6 monthsr Rs 1.15 lakh cr investment in PPP projects in 6 months

PM for Rs 1.15 lakh cr investment in PPP projects in 6 months

New Delhi: In a bid to ramp up investor sentiment, Prime Minister Manmohan Singh Friday set an investment target of Rs 1.15 lakh crore in PPP (public private partnership) projects across infrastructure sectors in rail, port and power in the next six months.

The proposals include Mumbai elevated rail corridor (Rs 30,000 crore), two international airports in Bhubneshwar and Imphal (Rs 20,000 crore) and power and Transmission projects (Rs 40,000 crore).

The decisions were taken at a meeting Prime Minister held here to finalise infrastructure projects for 2013-14 which was attended by Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Ministers of Power, Coal, Railways, Roads, Shipping and Civil Aviation.

The meeting decided that the proposal for creating a rail tariff authority will be accelerated and brought before the Cabinet soon.

The Prime Minister highlighted the need for ramping up investment in infrastructure to revive investor sentiment.

"For this purpose, a target of rolling out PPP projects of at least Rs 1 lakh crore in the next six months was set. A steering group is being formed to monitor the award and implementation of projects on priority basis," a PMO release said. The Prime Minister emphasised that a lot of work was
needed to be done to improve infrastructure sector and there should be no slackening of the pace of work, the release said.

Ahluwaila also made a presentation about the performance of the six infrastructure ministries and the targets for 2013-14.

The government, the release said, decided to form a steering group to monitor the award and implementation of projects.

Besides airports and Mumbai's elevated rail corridor projects, the group will also monitor two Locomotive projects (Rs 5,000 crore), accelerating E-DFC (Eastern-Dedicated Freight Corridor) (Rs 10,000 crore) and port projects (Rs 10,000 crore).

In the civil aviation sector, apart from two new international airports, 50 new low cost small airports will be taken up by Airports Authority of India.

Besides, a target for awarding eight greenfield airports was set for this year in PPP mode at Navi Mumbai, Juhu (Mumbai), Goa, Kannur, Pune (Rajguru Nagar Chakan), Sriperumbudur, Bellary and Raigarh.

The statement said airport operations and maintenance through PPP contracts will be introduced in AAI airports and the airports considered for these are Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad.

Besides new low cost airports would be set up at 51 places in Andhra Pradesh, Jharkhand, Bihar, Punjab, Uttar Pradesh, Arunachal Pradesh, Assam, Madhya Pradesh, Rajasthan and Maharashtra. As far as ports were concerned, it stated that both the new ports on PPP mode -- one at Sagar (West Bengal) and the other Durgarajapatnam (Andhra Pradesh) -- approved by Cabinet will be awarded. For funding of railway projects, the statement issued by PMO said an Inter-Ministerial Group of Railways, Finance and Planning will be formed for coming up with a "financing-cum- implementation mechanism in two months for clearing the large backlog of sanctioned projects of over Rs 200,000 crore in a prioritised and time-bound manner." As far as roads sector was concerned, the PMO emphasised that the slowdown in award of road projects should get reversed in view of the large number of relaxations that have already been provided to PPP road projects. Concerned over delay in execution of the PPP projects, the Prime Minister asked ministries to ensure proper implementation and monitoring of projects especially roads, an according to an official. The PMO said, "Expressways will get focused attention and the Planning Commission will work with the Ministry of Road Transport & Highways to suggest an implementation mechanism for expressways." Sources said given the poor performance of the Road Transport and Highways Ministry during 2012-13 when it could award barely 1,321 km of the 9,500 km target on account of factors like bidders shying away from projects, the PMO set a target of 5,000 km for the current fiscal. The target set was higher by about 1,000 km as the Road Ministry was in favour of fixing a target of 4,028 km for 2013-14. As far as the target for award of roads on OMT (operate, maintain and transfer) mode was concerned, the PMO was in favour of fixing a target of 3,110 km. However, sources said the Road Ministry put its foot down and ultimately the target was revised to 1,295 km. On power front, the statement said, the Ministry will work with Planning Commission and Finance Ministry to resolve issues in the power sector and improve generation and transmission capacity. Planning Commission Deputy Chairman Ahluwalia said that shortage in fuel supply was hurting the power sector. "The supply as part of the system has not been able to deliver as much fuel as was necessary," Montek said. "New policies for ramping up coal production will be put in place," PMO said.

Coal Secretary S K Srivastava said India will have to import 140 MT during the fiscal as compared to 135 MT last fiscal, of which 110 MT was imported for the power sector.

Talking about the shortfall, Ahluwalia said production was much below the target during the 11th Plan and exuded hope that output will increase.

Srivastava said coal production target has been fixed at 604 million tonnes (MT), including 482 MT for Coal India, for 2013-14. Last fiscal the production was recorded at 557 MT against the targetted 578 MT.

Ahluwalia also said in the years to come the higher cost for imported cost will have an impact on the power sector as India imports a large part of its gas requirement.

"Since imported gas is much more expensive...So there is a concern what is going to happen to power which is based on gas... If you don't have domestic gas, you have to import gas. Downstream it will have an impact on power," he said.

He also said that the meeting with the Prime Minister also discussed how to share the available domestic supply of gas.

"The issue there is that...First priority should be fertliser and second priority should be power. There has been discussion on whether we should do some sharing. Note will come to the CCEA, so the gas matter has yet to come to CCEA," he added. 


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