Project delays worry Tata

Ratan Tata, in his capacity as the chairman of the Investment Commission, has warned that major projects entailing a combined investment of nearly $60 billion are meeting delays and roadblocks for no apparent reason.

The projects cited include those of Posco, Mittal Steel, Tata Steel, Reliance Energy, Tata Power, AES, L&T/Dubal, Intel and some proposals from the banking and insurance sectors.

Tata has also pointed out that some investments "" like the agreement between British Gas and ONGC for three deepwater blocks in the KG basin "" are being impacted by discretionary interpretations of policy.

"This case has been referred to the Commission. It is being disallowed by the petroleum ministry on grounds which are being questioned. The net result is that the country is negatively impacted in investment and industrial growth and the opportunity of being globally competitive." 
 

WAITING ON THE FENCE
Select list of delayed projects	Proposed  Investment  ($bn)
Posco's 12 MTPA plant in Orissa	12
Mittal Steel's two 12 MTPA plants in Orissa & Jharkhand	18
Tata Steel's 25 MTPA in Orissa, Jharkhand & Chhattisgarh	17
Reliance Energy Hirma (Phase I)	4
Tata Power projects in Orissa, Jharkhand & Chhattisgarh	4
L&T/Dubal aluminium project in Orissa	3.5
AES 1,000 Mw capacity addition plan	1

Tata wrote to Prime Minister Manmohan Singh last month, with a copy to Finance Minister P Chidambaram, warning that much of the momentum that the country has generated is being dissipated. The letter has also been signed by the Investment Commission members Deepak Parekh and Ashok Ganguly.

The Investment Commission was established over two years ago, since then India has witnessed FDI inflows of $20 billion.

Following the missive, the Prime Minister's Office asked various central ministries to respond to the issues raised. The PMO followed up its first letter of April 24, with another missive on May 10 demanding an expedited response within 10 days. It is learnt that the ministries have since submitted their views.

Raising specific issues, the Investment Commission has pointed out that Intel's proposed $250 million investment for a semiconductor assembly and test facility had been impacted by delays in revising central government policies. However, the department of information technology is of the view that while Intel has not submitted any proposal, it is finalising the guidelines shortly.

The Commission has divided the delayed projects into three broad categories "" investments impacted by land and resource allocation or acquisition, investments impacted by state level issues and hindrances on account of delays in changing central government policy.

It has called for co-ordinated fast track projects to enable their speedy execution, given the delays over identification and allocation of coal or metal ore or actual land for the prospective plants.