India draws roadmap to implement infrastructure projects

Delay in implementation of infrastructure projects in India costs the country dearly with the government losing Rs 300-400 crore daily only on interest part, said minister for Road transport highways and shipping, Nitin Gadkari.

Nitin Gadkari

He was speaking at the 4th International Summit on ‘Infrastructure Finance-Building for Growth,’ organised by the leading business chamber the Associated Chambers of Commerce and Industry of India (ASSOCHAM) in New Delhi recently.

“We have streamlined projects in the road sector worth about Rs 1, 80,000 crore that were stuck up due to land acquisition together with forest, environment and other clearance related issues,” Gadkari said, adding, “We have solved about 80 per cent of issues that were involved with the Environment and Forest Ministry.”

He further said that the government is facing financial constraints and the decision for implementing public-private-partnership (PPP) based investments in the road sector has been taken after a very long delay.

“In the present scenario if projects are financed at 13 per cent rate of interest then it will impact economic viability and will be a blockage in infrastructure development, thus there is a need to reduce interest costs,” said Gadkari.

He also said that there are projects worth about Rs five lakh crore that can be implemented under the PPP model.

“Somewhere we have to find a way out to reduce cost of construction, interest rates and how we can improve economic viability and internal rate of return,” he said, adding, “We need to change the mindset and promote use of digital e-governance.”

With a view to reduce the number of road accidents in India, the National Highway Authority of India (NHAI) has taken a decision to improve accidental spots in existing projects, informed Gadkari.

He further said that there is a need to discourage road transport and promote inland waterways as it is very cheap and is non-polluting mode of transportation.

Calling private sector to play a key role in supplementing infrastructure development in the country, the minister said, “Infrastructure financing plays a critical role in stimulating economic growth by providing strong impetus to economic development, industrial growth and employment. We need to have a huge quantum of capital investments for this.”

With a decisive Government at the centre, there is now renewed focus in incorporating the element of ‘People’ to PPP projects, aided by transparent policy and contractual frameworks. India requires a consistent infrastructure drive, all the way up to 2050, Rana Kapoor, President of ASSOCHAM said.

Govt may dilute Land Acquisition Act

Nitin Gadkari

The recent announcement by Rural Development Minister Nitin Gadkari in the lower house of Parliament has indicated that the new government is inclined to do certain modifications in the Land Acquisition Act, which got the assent from President of India last year to become a law.

The government’s move is necessitated due to wholesome opposition from states over certain clauses in the Act, which has become the reason for the inordinate delay in several infrastructure projects worth billions of rupees.

However, experts believe that while making amendments in the Act, the government may dilute certain 'landowners-friendly' clauses to expedite the acquisition process for major PPPs and government-funded projects across various states.

While addressing the Lok Sabha, the minister indicated government’s willingness to review certain provisions of the Land Acquisition Act, which was projected as one of the landmark laws brought out by the previous UPA regime. The Act has faced criticism from various quarters including states and stakeholders.

"We can review the Land Acquisition Act... if there is co-operation from your side,"

Gadkari said, adding that certain provisions could be re-considered.

While replying to the discussion on Demands for Grants for Ministry of Road Transport and Highways, Gadkari, who also holds that portfolio, however, emphasised that the whole effort (making changes) should not result in delaying the road projects.

To ally fear about the compromise in offering compensation to landowners or farmers, the Minister said, there would be no compromise on the compensation amount to be given to people displaced by land acquisition.

Recently, the Rural Development Ministry suggested a number of amendments to the Land Acquisition Act, which would water down pro-farmer provisions like mandatory consent of at least 70 per cent land owners for acquiring land for PPP projects and 80 per cent for acquiring land for private projects.

The Act enacted during the UPA government is likely to go undergo drastic changes if Prime Minister Narendra Modi gives nod for the Ministry's proposals, which also include dilution of a key clause of Social Impact Assessment study criticized by states as time consuming for industrialisation process.

"The Consent Clause should be re-examined as ownership of land vests with the Government in PPP projects. The consent clause should be removed from PPP

projects. Alternatively, consent requirement may be brought down to 50 per cent," the Ministry had said in its note sent to the PMO.

The Ministry's suggestions for drastic changes in the Act came after most of the states recently came out openly against the new Act, complaining that it had hurt the process of

acquiring land for infrastructure projects.

At a recent meeting of State Revenue Ministers chaired by Gadkari, the states including Congress-ruled Haryana objected to provisions for mandatory consent and Social Impact

Assessment study.

The Right to Fair Compensation and Transparency in LandAcquisition, Rehabilitation and Resettlement Bill, 2013, which was earlier passed by both the houses of Parliament, was letter received the assent of the President to become a law.

The legislation was made to provide ‘just and fair’ compensation to farmers while ensuring that no land could be acquired forcibly.

The new Act replaced the archaic Act of 1894, which had various shortcomings including silence on the issue of resettlement and rehabilitation of those displaced by acquisition of land.