The Union government, the RBI and the financial insititutions have agreed to a time-bound action plan to achieve early financial closure of pending infrastructure projects.
At a meeting on infrastructure development chaired by the RBI, it was decided that such meetings be held every three months to iron out procedural and administrative problems to achieve financial closure .
The meeting noted that sanctions to infrastructure projects by the three FIs during the first three quarters stood at Rs 13,000 crore as compared to Rs 3,000 crore in 1996-97. As for disbursals, they stood at Rs 4,500 crore and Rs 1,600 crore, respectively.
The meeting, which was attended by cabinet secretary T S R Subramanian, RBI governor Bimal Jalan, secretaries of the various ministries and all FI and bank heads, was convened to exchange views on sector specific issues. In the power sector, the meeting decided to set up a technical group to address specific issues and formulate proposals.
The banks and FI chiefs however, raised certain specific issues regarding financial closure. This apart, the FIs are wary of the liquid fuel projects increasing power tariffs, which the SEBs might not be able to recover from consumers.
With regard to the telecom sector, it was noted that the progress was satisfactory. But various issues relating to basic services were yet to be resolved. A standardised concession pact for build-own-transfer highway projects was also sought at the meeting. The issues that the FIs have raised as a prerequisite to funding road projects included problems relating to land acquisition and specifying of eligibility criteria for traffic guarantees, capital subsidies and equity participation.
