The prime minister delivering the Independence Day speech from behind a concrete wall at the Red Fort is not what the nation wants to see. When Anil Swarup, head of the Cabinet Committee on Investment (CCI)'s project monitoring group (PMG), drew the analogy to counter the threat perception that the Aerocity project posed to the Delhi airport, it proved to be effective, to say the least.
Soon, the CCI decided to clear the 1,325-room hotel complex that entailed an investment of Rs 12,000 crore. It was decided windows facing the air strip at Delhi airport's terminal-III would have glass that meets the Defence Research and Development Organisation's specifications, similar to the secured glass podium behind which the prime minister stands to deliver a speech every August 15. Now, JW Marriott, a super-luxury hotel in the Aerocity complex, was inaugurated this Thursday.
Aerocity is one of the widely known projects cleared by CCI. Various clearances for 115 projects, involving an investment of Rs 3,86,206 crore, have been facilitated by CCI and its project monitoring group. "In these projects, all issues raised by developers have been resolved. Investment in these has already happened or will happen," Swarup, also additional secretary in the Cabinet Secretariat, told Business Standard.
Swarup and his team of four officers are part of a unit of the Cabinet Secretariat attached to CCI. He heads the project monitoring group set up in June, five months after the government notified the constitution of CCI. The need for this group was felt as the key to getting the projects rolling wasn't just a CCI decision but also implementation on the ground.
The challenge, however, lies in quantifying the investment and the economic benefits from these projects. "Though what matters is the project activity has started, industry is awaiting track-II data on these projects, which should tell us how much investment has actually taken place. It is important to monitor the turnaround time, as it will tell us the effectiveness of the mechanism," said Vinayak Chatterjee, chairman and managing director, Feedback Infrastructure.
Swarup admitted this data wasn't being captured. "Our job at the PMG is to see that the projects start operation. The Department of Financial Services will now start monitoring the flow of actual investment, since it can capture the data through banks that lend to the projects." He cited the example of the power sector, which has been the biggest beneficiary of this mechanism, recording fuel supply agreements for about 70,000 Mw.
Inspired by the Centre's initiative, the state governments of Bihar and Rajasthan have also put in place CCI-like mechanisms. In Bihar, projects involving investments of Rs 150-1,000 crore are taken up. Chatterjee, however, said with local and state issues stalling projects, it was important to have a hub-and-spoke arrangement, akin to the mechanism through which IDBI was created along with financial institutions at the state level.
The entire CCI process is carried out through a paperless office working out of the Vigyan Bhawan Annexe. All a project developer has to do is go to a portal created for this purpose and fill in the details, while indicating the 'sponsoring ministry'. A joint secretary in this ministry, under whose administrative control the project falls, accepts the project. This usually takes a week, after which the PMG accepts the project and issues raised by the developer are sent to the recipient ministries for comment. "After acceptance by the sponsoring ministry, the project is taken up at the next meeting of a sub-group," Swarup said.
The sponsoring ministry is the line ministry, while the recipient ministry is a euphemism for the one sitting on clearances. While the PMG is headed by Swarup and has representation from 18 ministries, there are 12 sub-groups, each headed by Swarup, with representatives of the project developer and joint secretaries in the sponsoring and recipient ministries as members. There is a fixed time table for the meeting of three sub-groups - Tuesdays for the railway and environment and forests ministries; and Wednesdays for the coal ministry. For the rest, the meetings depend on the number of projects.
Every Monday and Friday, Swarup attends the meetings conducted by chief secretaries in different state capitals. Holding these meetings is crucial, as about half the issues raised by developers pertain to state governments. A major chunk of these relate to the ministry of environment and forests.
Swarup said they plan to study the trends and processes that repeatedly created problems. "A special group will be created to look into such processes and suggest procedural changes. We will take the help of the Confederation of Indian Industry and Ficci (Federation of Indian Chambers of Commerce and Industry) to understand if the same objective can be achieved by revising or fine-tuning processes."
H K Modi, executive director of Electrosteel Steel, whose Rs 11,000-crore project in Jharkhand had gone through the CCI process, said such a committee was good but needed to be supported with an authorised directive. "Once decided by the committee, there should be no scope for someone else to raise an issue."
Modi's project was a case of corporate debt restructuring (CDR) involving Rs 1,307 crore. There are 28 lenders to the project, with State Bank of India as the lead banker. However, even after 24 banks, accounting for about 95 per cent of the CDR amount agreed to it, the proposal was stuck, as the remaining four members were opposed to the idea. When the issue was taken up by the PMG, Swarup asked all banks to arrive at a consensus - either agree to the decision or oppose it. "Either it is good for all lenders or for none," he told the bankers. With an intervention at a high level, all banks fell in line, Modi said.
Not all projects taken up by PMG are considered by the CCI, which is headed by the prime minister. Only those projects that fail resolution at the official level are taken up by the Cabinet committee. Though the threshold for projects is Rs 1,000 crore, Swarup says the group also takes up projects which, though involving a lower amount, are crucial for large investments. For instance, the CCI cleared an Indian Oil project involving the tap-off point for petroleum projects at Jatni in Odisha; the project was worth Rs 67 crore.
There are 17 such projects, involving investment less than Rs 1,000 crore each, which have been facilitated by CCI. This, however, does not mean all projects applied through the portal pass muster. "Some 140 projects were rejected from being taken up through the CCI route. These were either related to matters sub judice or had issues such as 'unhappy with the government' listed among matters that needed to be resolved," said Swarup.
The CCI mechanism seems to be working for many project developers, but the real gains would be evident at least a year later. Till then, "we do not treat anything as resolved, unless it is actually resolved", Swarup said.
WINDOW OF HOPE FOR INDUSTRY
Cabinet Committee on Investment
* Headed by Prime Minister, has 15 ministers as members and four special invitees, including deputy chairman, Planning Commission
* Only those projects that fail resolution at the PMG level are taken up by CCI
Project Monitoring Group
* Works under the Cabinet Secretariat
* Headed by additional secretary and has representations from 18 ministries
* The threshold for projects is Rs 1,000 crore but the group also takes up smaller projects that are crucial for large investment
Twelve sub-groups
* Each headed by additional secretary, has representatives of the project developer and joint secretaries in the sponsoring and recipient ministries as members Timetable
* Tuesdays are for the railway and environment and forests ministries; and Wednesdays for the coal ministry. For the rest, the meetings depend on the number of projects
* Every Monday and Friday, PMG head attends meetings conducted by chief secretaries in state capitals
