PPP projects' long wait for land cut shorter

Cabinet clearance no longer mandatory, normal govt rules to apply

Prime Minister Manmohan Singh on Thursday approved relaxations in the transfer policy for government-owned land. To speed up public-private partnership (PPP) projects in the infrastructure sector, the government has decided to do away with mandatory Cabinet clearance for land transfer.

Last year, the government had restricted ministries from clearing land transfers, as it feared corruption charges. That resulted in delays in several road, railway, port and civil aviation projects. The relaxation approved today will supersede the ban on the transfer of government-owned land to any entity except if the transfer is from one government department to another.

Land transfer from ministries to statutory authorities or public sector undertakings will now be allowed, subject to normal central government rules. Also covered would be all cases of land transfer on lease or rent or licence to a concessionaire, approved by the finance minister or the minister concerned or by the Cabinet, as the case may be.

THE PM’S INFRA PUSH

• June 1: Investment tracking system for both private and public sector projects above Rs 1,000 crore  
• June 6: Target set for infrastructure sector projects with a problem-resolution mechanism  
• July 12: Institutional mechanism for monitoring PPP projects 
• July 16: Committee formed to push private investment in inland waterways 
• July 19: Project clearance board to be set up under Cabinet Secretary for faster clearances 
• July 27: Road map drawn for flagship projects in railways, civil aviation and shipping 
• August 2: Relaxations in the transfer policy for government-owned land

The development and use of railway land by the Rail Land Development Authority (RLDA) under the provisions of the Railways Amendment Act, 2005 and the prevailing government policies would also be covered.

Feedback Infrastructure Chairman Vinayak Chatterjee stressed the ban on government land transfer had been impacting railway, port, airport and metro projects and said the government’s decision to relax norms indicated some proactive decisions were coming.

“On average, this will speed up the project development cycle by around six months because it will cut short the entire process,” said Chatterjee.

The ministry of railways had pointed out to a parliamentary committee in May this year that it had not been able to raise funds from PPP in 2011-12 because of delays in Cabinet approvals on the use of railway land.

After the ban was imposed early last year, the department of economic affairs was asked to prepare a comprehensive transfer policy for government land.

In case any department had to implement a project that required alienation of land through lease, licence or rent, it had to seek Cabinet approval.

“This was leading to long delays in awarding concessions for infrastructure projects, particularly PPP projects,” the Prime Minister’s Office said in a release.

PPP infrastructure projects are often built on government-owned land. The government continues to own the land, which is leased or licensed out. Mandatory Cabinet approval for each PPP project meant a few months were added to the process, the Prime Minister’s Office pointed out and added the relaxation would significantly speed up the award of PPP projects from August itself.