JNNURM projects marred by delays: Fitch

"In Fitch's view, the projects' progress under the JNNURM programme has been marred by delays due to the slow grant approval process, lack of manpower and absence of sound governmental oversight mechanisms," said Devendra Kumar Pant, Director in Fitch's International Public Finance team.

Pant said while some project delays were attributed to the slow land acquisition process, the lack of human resources is the single most important reason for ULBs' inability to benefit significantly from the first phase of JNNURM.

Fitch notes that as at end-December 2011, only 22 (18.33 per cent) infrastructure projects were completed out of the 120 sanctioned for 21 Fitch-rated ULBs under the urban infrastructure and governance programme, a company release said.

Financing the large sums required is crucially dependent on reforms and the institutional capacity to attain the desired service delivery and revenue generation, it said.

Contrary to the JNNURM's initiatives to incentivise ULBs to explore capital markets, ULBs failed to approach the market with debt issuances, the release said.