Meet to clear project hurdles

The finance ministry has called a meeting of the heads of PSU banks tomorrow to chalk out a road map to clear the bottlenecks hampering the implementation of large projects.

A case-by-case review of some of the major infrastructure projects will be undertaken by the ministry in the presence of senior officers of the ministries of power, steel, transport, shipping and the Reserve Bank, officials said.

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One of the major reasons behind the rising non-performing assets (NPAs) of PSU banks is the non-implementation of infrastructure projects owing to issues related to fuel linkage, environment clearance and land acquisition.

The NPA levels and the stressed projects of PSU banks have been showing an upward trend in the last four quarters.

According to RBI data, gross NPAs of PSU banks have gone up to Rs 2,60,531 crore as on December 2014. Gross NPAs rose sharply to 5.33 per cent in September 2014 from 4.72 per cent of total advances at the end of March 2014.

According to an estimate, PSU banks have taken a hit of Rs 96,484 crore because of the halt in production at thermal power plants following the cancellation of coal block allotments. About 300 stalled projects, involving investments of Rs 18.13 lakh crore, are awaiting resolution.

Financial services secretary Hasmukh Adhia had recently said, “We will be doing segment-wise analysis of stalled projects to understand what are the impediments and what kind of policy support is required to facilitate the implementation of these large projects.

“Large-sized stalled projects of infrastructure sector, including power, surface transport, steel, shipping, will come up for review in the meeting at Mumbai. The meeting will help the department crystalise actions required by banks, the finance ministry and other central ministries as well as support required from the RBI,” he had said.

Some of the important projects include Hinduja National Power Corporation entailing an investment of Rs 5,545 crore, Lanco Amarkantak Power (Rs 7,700 crore), Prayagraj Power Generation (Rs 10,780 crore) and Jindal India Thermal Power (Rs 9,121 crore)

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