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Planning Commission nod no longer needed for power projects

Wednesday 15 June 2005

Special Correspondent

Move to speed up implementation of projects

Proposals need not be placed before pre-Public Investment Board Time from zero-date to going to CCEA for approval to be halved Projects costing between Rs. 500 crores and Rs. 1,500 crores to be cleared in two months

NEW DELHI: A Group of Ministers (GoM) has decided to do away with the mandatory "in-principle" nod of the Planning Commission for power projects. This will aid in faster decision-making and implementation of projects.

The GoM, comprising Finance Minister P. Chidambaram, Power Minsiter P.M. Sayeed, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, Minister for Shipping T.R. Baalu and Law Minister H.R. Bhardwaj, felt that the current procedure of scrutiny at various levels required a change for speedier implementation of project proposals.

Official sources said there would be no need for the Commission’s in-principle nod, an exercise that took between four and six weeks. Nor would the proposals be required to be placed before the pre-Public Investment Board (pre-PIB). This mandatory exercise required six-eight weeks. These led to delay in construction and commissioning of projects which, in turn, resulted in cost-overruns.

To the concerns raised by the Finance Ministry and the Commission, the Power Minister noted that rather than the number and various levels of scrutiny of projects, the quality of scrutiny was important. Accordingly, the Power Ministry could refer proposals directly to the PIB, after scrutiny and consultation with the Central Electricity Authority.

Time limit fixed

According to Mr. Sayeed, a time limit of four weeks has been fixed for comments by the Finance Ministry and the Commission. If their comments are not available within the period, the Ministry can forward the proposal to the PIB directly.

The whole cycle - from the zero date to going to the Cabinet Committee on Economic Affairs (CCEA) - would now be 24 weeks, less than half the time required earlier.

It has also been agreed that any project costing Rs. 500 crores or less, after due scrutiny, can be sent directly to the CCEA, thus rendering the pre-PIB and PIB clearances redundant.

Projects costing between Rs. 500 crores and Rs. 1,500 crores would be cleared within two months from the zero date.

Power Ministry officials also raised the issue of 41 hydel projects ranging from 50 MW to 300 MW. The GoM agreed that both generation and transmission projects of up to Rs. 1,500 crores would also have fast track approvals within eight weeks as against 24 weeks. This, Mr. Sayeed said, would take care of most projects, including transmission, while preparing for the 60,000 MW capacity addition programme in the 11th Plan.

See online : The Hindu

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