A steering group will be formed to monitor the award and implementation
of mega projects that have been stuck in the pipeline, including the Rs
30,000-crore-Mumbai Elevated Rail Corridor and power projects worth
over Rs 40,000 crore. While the announcement was made in a bid to boost
the steadily declining investor sentiment, industry members are still
skeptical and believe there are many issues on the ground that need to
be resolved first.

Infrastructure sectors like road were the
worst hit with the road ministry managing to award only 14% of its
ambitious 9,500-km target for FY13, which has now been scaled down to
about 5,000 km (about 4,028 km to be done by NHAI and 900 km by the
ministry).

Stung by the poor performance last year, the
ministry has now changed its strategy. Its own targets, as informed to
the PMO, are significantly less ambitious (see table) and their focus
will now be on making sure all obligations, including approvals,
clearances and land acquisitions are met before rolling out any new
projects.

“We should be able to achieve 100% of the target in
the fourth phase of the National Highways Development Project, the
projects in the left-wing extremism areas as well as the first phase of
the World Bank-funded National Highways Inter-connectivity Improvement
Project. The grey areas, however, would for projects in the north-east
where the preparatory work is poor and those under the
build-operate-transfer (BOT) model since market conditions are too
uncertain,” said a senior road ministry official.

In the wake of the dismal response by the private sector to PPP
projects for highways, the government has approved a slew of proposals,
including relaxations in environment norms and exit options.

“These are positive steps but there are still issues, including bankers
not being too keen to lend. Multiple projects are yet to achieve
financial closure because of problems with getting 100% land
acquisition, forest clearances, etc. Unless the approval process is
expedited, bidders will continue to be cautious,” said a CEO of the
highways wing of an infra major.

The shipping ministry too
missed its target and was able to award port projects worth Rs 6,765
crore out of the Rs 14,353 crore planned. This year’s investment target
has been kept higher at Rs 25,000 crore and the government is also
planning to award two new port projects worth Rs 20,000 crore — in
Sagar, West Bengal and Durgarajapatnam in Andhra Pradesh — this
financial year.

Both these projects have been in the works for a
while with the ministry initially struggling to zero in on a site for
the port project in Andhra Pradesh; the techno-economic feasibility
study for Durgarajapatnam is yet to be completed.

Investors
continue to be wary over issues like security clearances and the rigid
tariff norms. The shipping minister GK Vasan recently took care of the
concerns, assuring that the government will soon finalise the new tariff
guidelines, expected to provide autonomy to the port terminals to fix
market-linked tariffs for major ports in India.