Cement, Energy and Environment

KP Singh, Retired Executive, Railway Board, echoes this, saying , "Every year, a large number of project are added purely to get votes and support and the funds are not arranged in advance, so whatever funds are available get distributed over a large number of projects very thinly. Thus, projects do not make much progress." He also cites land acquisition as a major bottleneck, a point reiterated by RK Gupta, Managing Director, Dedicated Freight Corridor Corporation of India. His second concern relates to the non-availability of assured funding. "There is a huge list of projects and hundreds of thousands of crores of sanctions are pending," he says. Shipping and ports As Frost & Sullivan tells us, in 2012-13, almost 25 projects have been identified to be awarded at various major ports in the country under the PPP mode. The Ministry of Shipping's 10-year plan , the Maritime Agenda 2010-2020, intends to develop the capacity of Indian ports to 3,200 mt by 2020 at a cumulative investment of around Rs 2,774 billion in three phases. This proposed investment will be majorly concentrated on non-major ports and on construction of berths. But, the PPP projects at major ports are lagging - of the planned target of 23 projects, only three have been finalised and awarded in FY2012 owing to problems in land acquisition and statutory clearances. And according to the Ministry of Statistics report , of the six projects , three have been delayed. In fact, the construction and development of two offshore container berths and terminals at Mumbai Port - allotted to Gammon and a Spanish company - has reported an additional delay of seven months. The setting up of LNG Regasification Terminal at Puthu Port Trust, reported an additional delay of two months. "The Government had targeted 42 projects , both PPP and non-PPP to be awarded in 2012-13. But it is understood that till now, only 14 projects have been awarded ," says A Janardhana Rao, Managing Director, Indian Ports Association. "When projects are stuck , it is because of extraneous factors , mostly on account of court cases , and environmental and forest clearances. " For his part, L Radhakrishnan, Chairman, Jawaharlal Nehru Port Trust (JNPT), tells us that it hopes to award Rs 9,000 crore worth of projects by the end of the year, including two for container handling. "Right now, a Rs 1,500 crore dredging project to dredge the Mumbai Port and JN Port channel to 14 metre is under implementation and 10 per cent of the work has been completed," he reveals . "Work will begin on a Rs 1,000 crore 330 metre container berth extension project, awarded a couple of months ago, after the concession agreement is signed. This may be implemented in a year." In his view, environment clearances take the longest time. Meanwhile, Michael Pinto, Former Director General Shipping , Government of India, Former Chairman, JN Port, and Former Secretary– Shipping, Government of India, is quick to express his concern over some projects that have been recently aborted. "One was a project in Ennore Port where they suddenly backed down saying the economic situation is bad," he says . "But in nearby Krishnapatnam port, we are spending over Rs 1,000 crore on expansion and in getting into the container business. And just near Ennore, L&T has put up the new Kattupalli port. So why is only Ennore affected? Second , a huge Rs 6,000 crore- 6,800 crore container project in JNPT didn't take off. There was a consortium consisting of the PSA and ABG but for some reason they didn't sign the agreement and finally the port had to cancel the whole project and the deposit amount was forfeited." Experts believe the parties in both cases, especially JNPT, went too high. Pinto, though , has his own reasons for why projects fall through . "You don't need one model concession agreement for every port," he argues. "Ideally, a concession agreement should capture those areas in which the port has an advantage. So you need an individual agreement in each port. The second thing is that you need to go to the PPP approval committee in the Finance Ministry for all PPP projects. If the Ministry of Shipping has the overall knowledge of the port, why go to the Finance Ministry for further checking? It just adds another layer and inhibits investment. Finally, the tariff regulatory authority plays havoc with private investment in major ports." Airports The generation of aviation infrastructure in India has been energised by the involvement of private players. As Frost & Sullivan tells us, the development of airport infrastructure in Delhi and Mumbai has been taken up under the PPP mode to create world-class ai rports; the development of Kolkata and Chennai international airports has been taken up by the Airport Authority of India (AAI); and Bengaluru and Hyderabad international airports have been developed under the PPP mode as Greenfield airports. Further, the AAI has taken up the development of 35 non-metro airports at an estimated cost of Rs 4,300 crore. •I