NIB likely to be toothless in cutting project delays

Even as the government is set to go ahead with the creation of a National Investment Board (NIB) to expedite clearances for infrastructure projects, the effectiveness of such a body is far from certain.

A Business Standard study of 564 projects worth more than Rs 150 crore monitored by the Ministry of Statistics and Programme Implementation (Mospi) indicates the NIB could find itself helpless in eliminating project delays.

Of the 564, 367 are major projects with investment between Rs 150 crore and Rs 1,000 crore and the remaining 197 mega projects involve more than Rs 1,000 crore.

Ministry data show 192 of these projects were showing cost overruns on June 1 this year and 251 projects had time overruns ranging one to 216 months.

The NIB may envisage a single-window system for solving problems associated with the projects at the central level but an analysis of the time and cost overruns for the ongoing projects shows 69 projects are facing land acquisition problems and 30 coal projects are grappling with rehabilitation and resettlement problems.

Further, law and order is a factor behind delays in 25 projects in the railways, coal, telecom, petroleum and power sectors. These sectors are facing land acquisition problem, too.

Similarly, 49 projects are facing problems in environmental clearances and include projects from the coal, petroleum, railways and power sectors. Adverse geo-mining conditions have also plagued 21 projects from coal, power and railways and 33 projects are facing contractual issues.

With this, 44 projects have been delayed due to slow progress in non-civil works. And, 71 other projects have been facing various problems, including technology selection, award of contract, delay in civil work, court cases, inadequate infrastructure, bad weather and statutory clearances.

Only 65 railway projects are getting delayed due to fund constraints.

Speedy project clearances and implementation would require solutions at the local and state levels, where the NIB would not be of help as it will comprise representatives only from central ministries.

The government on its part, though, believes the NIB under the Prime Minister would be a major step in expediting investment in the infrastructure sector.

A senior official from the Prime Minister's Office said the government top echelons were unhappy with some ministries' opposition to the NIB proposal.

The Prime Minister was likely to clear doubts and apprehensions over the NIB later in the week, said the official. Finance Minister P Chidambaram had floated the NIB idea at the full Planning Commission meeting last month and suggested it could take up projects worth more than Rs 1,000 crore.