Investment panel fails to deliver on stuck projects

For energy security, directs oil, defence ministries to sort out differences in a month

The much-awaited maiden meeting of the Cabinet Committee on Investment (CCI), expected to clear the hurdles for $13.5 billion worth of investment in 47 stalled oil exploration projects, on Wednesday ended with a directive to the oil and defence ministries to sort out differences over 39 of those blocks within a month.

Headed by Prime Minister Manmohan Singh, the panel has been vested with overarching powers to clear investment bottlenecks. It had been set up in December to fast-track clearances for projects costing more than Rs 1,000 crore and boost the country’s investment climate.

After a 90-minute meeting, in a kind of fait accompli, the defence ministry was told the nation’s security was paramount but energy security, with $15 billion already invested and oil found in some blocks, too, could not be ignored.

Defence ministry officials pointed out their problems — the Navy carries out exercises off the Visakhapatnam coast, sometimes with friendly nations like Japan. Most of the oil blocks where the ministry had raised objections fell in this region. A way out suggested to the Navy was to locate the exercises elsewhere. The two parties were told to reach a settlement and report back to the committee within a month. It was not a contentious meeting, officials said, but one where both Finance Minister P Chidambaram and Prime Minister Singh were determined to clear the issue. (Click for table & graph)

The petroleum ministry had sought a directive from CCI to waive off the stringent defence clearance conditions for 32 blocks after contractors expressed their inability to comply with these conditions. For another 14, the defence ministry had labelled the areas as ‘no-go’ for exploration activities. Besides, the commerce ministry had objected to an ONGC block where an SEZ had been notified in Gujarat.

Earlier, the petroleum ministry had managed to get 27 of the 78 blocks cleared by the defence ministry. Oil companies, including state-owned ONGC and private-sector Reliance Industries and Essar, had committed exploration programmes after clearances by various government agencies, but approval for 78 blocks was cancelled, leading to stoppage of work.

Officials said CCI would take up the stalled power projects at its next meeting.