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FM meets bankers, industrialists to speed up projects

Union Finance Minister P. Chidambaram Tuesday said he would set up a cell in his office to monitor and resolve the issues for speedy completion of the stalled infrastructure projects.

The proposed cell would take up the issues on ongoing basis with concerned departments, he announced at a meeting with leading industrialists and top bank executives here.

The finance minister held the meeting to review about 28 stalled projects, particularly in infrastructure space, in Andhra Pradesh. The combined value of the projects is Rs.92,500 crore including banks funding of Rs.69,000 crore.

"These projects have got held up for various reasons. He wanted to have first hand information from promoters as to what are the reasons for that. He has consented to take up with these issues with the concerned ministries and resolve them," Andhra Bank chairman and managing director B.A. Prabhakar told reporters after the meeting.

The companies said they were experiencing bottlenecks because of delays in land acquisition in the case of road projects and delays in concluding fuel agreements with Coal India Limited and power purchase agreements with state electricity board.

"FM was keen that the issues are resolved fast so that bank funding is released and the projects become sustainable. He has also said that some of these issues might take time and that he would create a separate cell in his office so that these are monitored on ongoing basis and resolved," Prabhakar said.

Sixteen of the project reviewed were power projects while there were 12 road projects. The power projects involve investment of Rs.6,000 crore to Rs.7,000 crore and the cost of road projects varies from Rs.1,000 crore to Rs.3,000 crore.

"Most of the issues were related to gas allocation, fuel supply agreements and power purchase agreements and these issues relate to coal ministry, environment ministry and National Highway Authority of India."

The Andhra Bank CMD said there were no issues with the bankers, except one or two projects where disbursement was held up because of promoters not complying certain conditions.

According to him in all the stalled projects, the banks have already disbursed 35 to 40 percent of their funding.