PMO land transfer move to aid PPP projects: Feedback Infra

Analysing the impact of this move,Vinayak Chatterjee, Chairman of Feedback Infrastructure said the relaxation of the land transfer rules is expected to aid PPP projects. He added that the notification is likely to impact projects requiring central government land. He mentioned that 60-75% infrastructure projects require government land.

This would also facilitate private projects to get central government land without the nod from the cabinet. “If a private power plant gets a sanction to set up its facility and the land in any location in India happens to be land owned by the central government then the permission need not go to the cabinet. To that extent, it helps the private sector. In the old situation, it would have again gone to the cabinet. First, it would have gone for a project clearance then it would have again gone to cabinet for a land clearance but it is only for central government owned land. So to that extent, there is also limitation in its scope,” he explained.

Furthermore, Coal India agreeing to 80% coal supply is a significant positive move, Chatterjee stated. “I think that is a significant move forward and full marks to the PMO for persistently pushing the agenda with Coal India. So my take is that a large portion of the policy framework now for solving the fuel crisis has been taken. Now we are moving to the implementation phase,” he added.

Below is an edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy.

Q: Could you explain the materiality of this move. What percentage of projects roughly would be required to use central government land, and what kind of opening up then can we expect in such projects?

A: My rough guess is that anywhere upto 60-75% of projects in the infrastructure area, in some manner, require central government land. For example, the biggest is railways. Even in the last railway budget speech that Mr Dinesh Trivedi gave and the railway modernization plan and a twelfth plan documents, a substantive portion of railway finance improvement is supposed to come from unlocking value embedded in vast tracks of railway land including station development and various PPP projects.

After a port is built, the crucial economic hinterland is the land area surrounding the ports where you need container terminals, liquid fuel terminals, freight stations, loading-unloading bays and many of them are now being developed by PPP mode. So it need not necessarily be PPP. For example, the port authority can give land to Concor, which is again an arm of the Indian government to railways for storage of food grains.

For example, government land can be given to container, the central warehousing corporation to build warehouses for grain storage. So across the spectrum, whether it is sometimes defense land that needs to be alienated to extend the runways or airports or other issues or railways or ports or even wasteland lying with the central government under the national wasteland authority to set up a power plant. To converge, it opens up administratively, a huge degree of easing of the situation, in terms of this notification that came yesterday.