In the midst of much apprehension that the government might lose sight of reforms following the political events of the last few days, it?s heartening that the Cabinet Committee on Investments (CCI) was able to transact some business at its third meeting on Wednesday. The high-powered CCI?set up to fast-track projects of over R1,000 crore, essentially by mediating between ministries with differing views?was able to clear five proposals for oil and gas exploration, including those of Reliance Industries for the KG-D6 basin and NEC-25 blocks. Although three blocks in the KG basin?which ONGC and British Gas were planning to explore?remain ?no go? zones and may need to be given up since they encroach on a proposed naval base, at least a decision has been taken. Both are likely to be given fresh acreages and the costs incurred by them will be reimbursed in some form. While CCI?s first two meetings may not have resulted in concrete action, the discussions were clearly useful. Some months ago, exploration in as many as 73 blocks?including proposals by ONGC, RIL and Cairn?was stuck. As things stand now, of the 39 oil blocks where there were still differences of opinion between the petroleum and defence ministries, 32 have received conditional approvals.
It?s important the CCI gets cracking and that some of the stalled projects worth R8 lakh crore get off the ground. Contrary to popular perception, it?s not always the environment ministry that?s been responsible for delays; the defence ministry and, in some instances, the local police too have raised what could be perfectly valid objections. What is disconcerting, however, is that the approach to decision-making remains casual and needs to be more streamlined at all levels; for instance, it?s hard to understand how the government went ahead and auctioned oil blocks, fully aware that the defence ministry had raised objections to explorations in some areas; in the case of the Delhi Airport Aerocity, R8,000 crore of investment in hotels is stuck because the authorities are now talking of a possible security threat as the hotels overlook the airport runway. The good news is that there have been some regulatory changes that should speed up clearances; the delinking of environmental and forest clearances for road projects is a case in point. Clarity on price pooling for coal, which the finance minister referred to in his Budget speech, should help stalled power projects take off. However, acquiring land remains the biggest hurdle for promoters?the Land Acquisition Bill, in its current form, makes acquiring land impossible, and there?s little CCI can do about this.
