Ministries hauled up for slowing infra projects

Ministries hauled up for slowing infra projects

Mumbai: A parliamentary panel that oversees how money was spent on public projects criticized the ministries of shipping, roads and aviation for delaying capacity expansion programmes. It directed the ministries to take suitable measures to make highway projects attractive to private parties in a bid to promote private-public partnerships.

The 30-member panel on Thursday reprimanded the shipping ministry for having “miserably failed to perform both financially and physically in implementing the various projects" according to plan, and directed it to ensure projects are completed within the stipulated timeline.

According to a 11 April report by Citigroup Inc.’s brokerage division, the number of projects under implementation, but stalled, rose in the fourth quarter of the last fiscal. “The total value of such projects has increased to 757,800 crore in March 2012. The majority of stalled projects (77%) belong to the private sector," the report said. “Around 8.9% of investments (as a percentage of under-implementation projects excluding those that were announced) at end of Q4 FY12 were stalled. This is the highest level of stalled projects since 1995 and is even higher than in 2003 (after a multi-year slowdown in capex and before the start of the last capex cycle)."

New government projects saw a 26% decline in the fourth quarter of last fiscal and project announcements remained weak because of elections in five states of India, the report said.

According to Manish Saigal, executive director and head (transportation and logistics), KPMG, the delays in port-to-land infrastructure is going to cost 1-2% of the country’s gross domestic product (GDP). “All major port, sea side, rail and land infrastructure are facing a delay of 3-4 years. The delay cannot be attributed to a single ministry as there are multiple ministries involved in these projects," Saigal said.

On 4 January, Mint had reported that India is likely to miss the target of increasing the capacity of major ports as the government has awarded only one out of 23 proposed projects.

The government had identified 23 port projects to increase the capacity of ports in India by 236.63 million tonnes a year with an estimated investment of 16,743.92 crore in the last fiscal year, according to Maritime Agenda 2010-20—a shipping ministry plan for the development of the maritime sector.

The country’s major ports play a key role in facilitating external trade, which accounts for 40% of India’s gross domestic product.

The parliamentary committee expressed its concern over the way the review and monitoring meetings are being done by the shipping ministry to assess the progress of expenditure. It has sought the utilization status of expenditure for various ports.

Mint could not immediately reach the officials of the respective ministries for a comment.