September 28, 2008

CEOs blame land acquisition for delays in infra projects: CII survey

New Delhi, Sept 28: With the row in Singur, land acquisition has emerged as a big impediment for industrial projects, particularly for those in the infrastructure sector, an overwhelming 81 percent CEOs said in a CII survey.

These CEOs of infrastructure developers and financiers felt land acquisition was the biggest hurdle in implementation of infrastructure projects, the survey said.

Other factors cited for project delays by majority of the respondents are environment clearance, government approval and lack of coordination among various implementing agencies.

A case in point is the Tatas' virtual withdrawal of their small-car project from Singur in West Bengal to an alternate location despite the state government requesting them to stay back. The group had to face widespread violent protests in Singur on the issue of compensation and return of 400 acres of land at the project site.

Further, the report says, rising input and interest costs also lead to cost overrun for infrastructure projects, which was a cause of concern for both developers and financiers.

According to 46 percent of the respondents, increase in input costs is expected to be in the range of 10-20 percent, whereas 23 percent respondents expect it to go beyond that.

While rising costs would be absorbed by project developers, some companies were likely to pass it on to the government, the survey said.

About 58 percent of respondents felt there would be renegotiation of prices that may lead to further delay in implementation of projects.

However, 67 percent of those surveyed by CII said the infrastructure investments were "on track". According to government estimates, the infrastructure sector requires investment worth more than USD 400 billion in the 11th Plan period. (Bureau Report)

Singur has made US investors wary, says US consul-general
26 Sep, 2008, 1936 hrs IST, PTI

The political tussle over the Tata Motors small car project at Singur has made US investors wary of investment, US consul-general in Kolkata Beth Payne on Friday said. Speaking at an interactive session organised by CII (eastern region) here, Payne said the Singur development had forced cancellation of the proposed visit of USIBC trade mission to the city this week. ''The trade mission was very excited to come to the city. But the developments taking place there had led to the cancellation," Payne said. She said US investors were very particular about respect for contracts and signed agreements. The trade mission is wondering if Ratan Tata is not able to succeed in West Bengal, how US investors would. Talking about West Bengal, she said the state had an educated workforce, low attrition rate and low cost of living. ''These characteristics make the state an attractive investment destination." ''It is regrettable that the state missed the opportunity," the envoy said.

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