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Centre may shut down 116 infra projects due to unresolved hurdles

Nearly 116 infrastructure projects worth Rs 1.26 trillion could be shut down by the government due to unresolved hurdles ranging from land acquisition to Centre-state tussles, Business Standard reported on November 7. Quoting an internal report prepared by NITI Aayog, the policy think tank of the government, the publication said that these 116 projects feature in the list of those terminated, on hold, or bound for foreclosure.These may be removed from the Centre’s project-monitoring system, which has been created to expedite infrastructure execution, it said. Moneycontrol could not independently verify the report.

“The majority of such projects are from the railways and roads sectors. While in the case of railways, 50 projects have been put on hold (some of them sanctioned 48 years ago) and 15 are yet to be sanctioned, the roads sector has 33 projects lined up for foreclosure, termination, or facing legal issues.

Therefore, most of the sunk expenditure incurred is on railways and roads,” the Business Standard said citing policy think tank’s report. The said projects have incurred a cumulative capital expenditure of Rs 20,311 crore. Most of these delayed projects will have to be replaced by new ones despite sizeable infrastructure already in place. Reportedly, many projects continued to witness cost escalation until the government decided to put them to an end.

To put it in perspective, the cost of stuck railway projects escalated by about 49 percent to Rs 88,373 crore, as many of them were put on hold for a long-standing period. The Railways’ 72 projects have seen an expenditure of over Rs 8,500 crore so far, the report stated. On the other hand, the cost escalation for 33 stuck projects at road transport and highways is lower at 6 percent. These had a higher sunk cost than railways, at Rs 11,000 crore.

Moreover, as many as 55 of the 116 projects have been stuck due to land acquisition issues between the Centre and states, and bureaucratic red tape. The ministries concerned have raised issues of state governments either not sanctioning the acquisition of land or not giving the requisite approvals, according to the NITI report. Nearly 10 projects have been stalled for years due to states reneging on their cost-sharing agreement. Some projects have also been delayed due to environmental concerns.

Two coal projects, in Chhattisgarh and Madhya Pradesh, may be shelved and removed from the monitoring system because environmental concerns remain unaddressed; there is a sunk capex of Rs 105 crore. Three projects of the National Highways Authority of India (NHAI) in Tamil Nadu, connecting the Kerala Border to Villukuri and Kanyakumari, have been stalled following environmental concerns raised by the National Green Tribunal (NGT). The projects are now proposed for shelving. Several projects in ecosensitive areas in Northeastern states are set to be terminated, but no explicit reason has been provided for that, the report said.

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