PROJECTS WORTH RS.5 LAKH CRORE STALLED!
By Ruma Dubey
The effect of policy paralysis has made its strong presence felt in the GDP numbers, month after month. They have now become a set of depressing numbers, one which no one, except maybe the Opposition, looks forward to. So if GDP is down and all sectoral growth is down, naturally we are bound to see its effect on the ground too.
The Centre of Monitoring Indian Economy (CMIE) has put out a report, which like a smack on the face, puts things into perspective – how deep rooted are the effects of this sitting tight, doing nothing but parlaying to political allies to keep the seats intact.
According to CMIE, investments worth more than Rs.5,00,000 crore were shelved in FY12 of which Rs.1,70,000 crore worth projects were abandoned and balance, Rs.3,30,000 crore worth projects were stalled. As against this, in FY10, projects worth Rs.2,80,00 crore were shelved.
In FY12, the only solace one can take is from the fact that 20 projects accounted for over 68% of the total cost of shelved projects. Electricity and steel accounted for 60% of the value of projects shelved of which electricity accounted for one-third and steel for one fourth.
And the primary reason, in most cases was lack of availability of land. This was followed by lack of coal linkages, withdrawal of tax holiday and the most startling revelation made by the report is that – not a single project was stalled on account of rising interest rate or inflation.
A quick look at projects stalled due to non-availability of land:
1: Nuclear Power Corporation's 6,000 MW Haripur plant, the largest investment to be dropped
2: Vavasi Telegence's silicon complex in Bikaner did not progress as it could not find the requisite land for the project.
These two projects were worth Rs.45,000 crore or 9% of the total projects stalled.
3: Haripur nuclear plant in West Bengal
4: West Bengal Petrochemical PCPIR project
5: Posco's 6mtpa Karnataka Steel Project. This project is stalled till the state Govt finds alternate land.
6: Arcelor Mittal's Jharkhand Steel Project. Lakshmi Mittal has told the company's shareholders in London that the Indian projects may not see the light for 5 to 10 years.
7: Kerala State Electricity Board’s Cheemeni gas based super thermal power project because of local resistance against the project.
8: Coal based power plant in Srikakulum in Andhra Pradesh was shelved because of local agitations against the plant.
9: Suryachakra Thermal Power Project in Madhya Pradesh stalled as Ministry of Environment and Forests deferred its approval.
10: Gujarat Vittal Innovation City project - near Surat was stalled following land acquisition related issues. The project might shift to Andhra Pradesh.
11: Ahmadabad World Class University Project abandoned following difficulties in acquiring land.
Projects abandoned due to lack of coal linkages:
1: Adani Power's 3,300 MW Rs.16,500 crore Bhadreshwar Coal-based power project in Gujarat stalled due to lack of clarity on coal supplies.
2: GMR's Rs.7000 crore 1,370 MW Shahdol Thermal Power Project in Madhya Pradesh
3: Srinivasam Energy's Pentakota coal based power project stalled in Andhra Pradesh.
4: Surya Vijaynagar Steel ‘s 6 mtpa Bagalkot project, which had even achieved financial closure by Jan 2011 was withdrawn due to mining ban in Bellary.
5: KIOCL's Rs.8000 crore , 1.5 mtpa steel plant also shelved due to mining ban in Bellary.
6: Universal Success Enterprise's Rs.250oo crore, 5,000 MW Raigad coal-based power project stalled
7: Rs.7,000 crore Adheli and Bhogat port project stalled
8: Essar's Vadinar oil refinery's third phase refinery expansion shelved as tax holiday available to refineries ended in March 2012.