New Delhi, July 22: The Indian industry on Tuesday extracted a bagful of promises from prime minister IK Gujral for the infrastructure sector.

Gujral and his team, which comprised top ministers and secretaries, told a 21-member high-level industry delegation at a meeting here that the government would resolve several of the problems which plagued the infrastructure sector within two to three weeks.

The interactive two-and-a-half hour session resulted in a number of on-the-spot decisions, including an open-ended offer of availability of funds for new power projects both under revenue and capital expenditure, shorter agreement timeframe for allocation of naphtha for short-gestation power projects, tariff regulatory commission on power and early announcement of policy on corporatisation of ports.

The prime minister assured that all clearances for power projects (the fast-track ones as well as those pending) will be given by December 31. This includes the environmental clearance. Currently, such projects require up to five clearances from various departments on ecological grounds. Gujral also promised that ways will be found to give the FIPB more teeth and perhaps make it mandatory that very few clearances would be required once this board has approved of a project. The logic being that the FIPB has representatives of concerned ministries anyway.

The prime minister stressed the need for frequent interaction between industry and government and said that a meeting every three months would give the requisite urgency to infrastructure projects and would provide an opportunity to review implementation of policy and projects.

Finance minister P Chidambaram said that funds will not be a constraint for new power projects in the central sector. His offer, he said, was an open-ended one and the only limit will be the absorption capacity of the sector. The projects for which MoUs have been signed will be closely monitored by the power ministry with the help of the programme evaluation review technique (PERT) chart and the required central clearance will be given before December. The ministry is also working on clearing certain projects to create an additional generation capacity of 3,000 to 5,000MW.

The funds credited to separate escrow accounts will be considered for servicing of loans obtained for specific projects. With regard to bids made in response to tenders for erstwhile Delhi Electrical Supply Undertaking, it was decided that the power ministry will provide an early reply.

This week the railway ministry will hold a meeting with independent power producers who have signed an MoU with the Haryana government for a Panipat project regarding coal delivery.

The petroleum minister explained that since the liquid fuel policy is a new area, the ministry is working out details and decisions regarding the agreements will be expedited.

It was also decided that the ministry will quickly work out a policy for enabling private parties importing liquid fuels to utilise the excess capacity of oil companies. It was also agreed that oil companies will look at the feasibility of using private ports for unloading of liquid fuels and will also project their requirements to private investors in new port projects.

The finance minister agreed to the suggestion that public undertakings like NTPC should be allowed to expand equity so that they can borrow from markets, both in India and abroad, for investing in power projects. As regards ports, apart from an early announcement of corporatisation policy, it was explained that a notification had been issued recently delegating powers to the ministry of surface transport to give environmental clearances within 15 days. It is expected that nearly 30 projects will be cleared by the ministry.

With regard to industry's demand for bankable documents relating to BOT projects, it was explained that the National Highway Authority of India had worked out certain bankable documents and also drawn on international expertise. Hudco has also pioneered in financing smaller road developemnent projects through private sector, the meeting was told.

Taking note of the industry's suggestions, prime minister said road and township development should be taken up as a single activity and also directed the ministry of surface transport to coordinate with states once an inter-state road project is taken up so that problems could be resolved at a central point.

He also announced that the government was already examining the Urban Land Ceiling Act with a view to amending some of its redundant provisions.

The meeting was attended by the ministers of finance, industry, railways, power, petroleum, coal, mines, surface transport and the deputy chairman of Planning Commission.

Gujral asked industry leaders why private investment was held from flowing into the infrastructure sector despite announcements of various government incentives, an official spokesperson said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.