NEW DELHI, July 22: If the faces of captains of industry were anything to go by, then their meeting with Prime Minister I K Gujral and his team was a roaring success.

And why not? The Prime Minister and his team which comprised top ministers and secretaries promised the 39 member high level industry delegation that they would resolve several of the problems which bedevil the infrastructure sector. More important, in the course of an interactive two and a half hour session, Gujral gave deadlines of two to three weeks to come up with solutions to several problems. He also promised that such meetings would take place every three months that means the next one will be in October. At which time, according to a top industrialist who participated in the meeting, the ball will be on the other foot"in case the Prime Minister is unable to deliver on his promises, we will take him to task in the next meeting".

The Prime Minister's promises, although absolutely essential if private sector infrastructure develop hit is to, are by all accounts, tall ones. Gujral promised, for example, that all Central clearances for power projects (the fast track ones as well as the others which are pending) will be given by December 31.

There is some confusion, however, as to whether this includes the much dreaded environment clearance. While industry sources who briefed the press were quite certain that this included environment dearances, the PIB press note refers only to Central clearances. In fact, apart from getting the Central environment clearance, projects still need four clearances from various state departments for various. aspects of environment.

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 the FIPB has approved of a project. The logic being that the FIPB has representatives of concerned ministries anyway. Private sector representatives, however, pointed out to mediapersons that this was not the first time that the issue of providing teeth to the FIPB had either been discussed or agreed to inprinciple.

Gujral's promise

Gujral's announcement of a decision to hurry environment clearance for ports also cheered industry enormously. He announced that a notification had already been issued which ensured that the Ministry of Surface Transport (MoST) would henceforth be empowered to give environment clearances as well. That means that if a port project is cleared by MoST, it will be deemed to have been give environment clearance as well. It is expected that nearly 30 projects will be cleared right away by the Ministry.

When a private sector representative pointed out that the MoST was in charge of only 11 major ports, the Cabinet Secretary stated that the same principle would apply to the minor ports as well. This, again, seems to be an area where considerable confusion could arise as private sector representatives are very bullish on this aspect it does seem difficult to see how the Government will be able to persuade states to do this.

In continuation of the meeting held by the Cabinet Secretary last week, it was pointed out that the issue of financing and working on bankable agreements between various parties and the financial institutions (FIs) would be completed in a fortnight. Right now, the crux of the problem is that FIs are reluctant to bankroll long-gestation infrastructure projects which are intrinsically riskier. The Government has given the group of FIs a period of two weeks to come up with their new model contracts. Senior industry spokespersons said it was important that FIs were going to do this but it was unlikely that anything would emerge in two weeks.

Senior ministers who attended the meeting included the Finance Minister, the Industry Minister, the Minister of State for Power, the Railways Minister, the Petroleum Minister and the Minister for Communications.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.