Frozen projects haunt State

A sad state: Projects cleared 20 years ago still being implemented

Scouting for land, it has created a land bank, and hunting for investors, it has had some big names queuing up at its doorstep in the recent past —– giving it enough reason to rejoice.

But that’s not it. Glance through a sheet of government data and it’ll reveal that the number of projects actually implemented out of the total projects cleared in the State is shockingly low. Chew this: in the last 22 years, an alarming 3,215 projects worth investment proposals to the tune of Rs 49,818 crore, have slipped into a deep freezer in the State, even as successive governments have spent time boasting of clearing as many as ‘4,526 projects’ through the single window clearance committee.

Among these, 2,699 projects are “under implementation”, and out of them, 186 projects worth Rs 1,979.39 crore were cleared between 1988-89 to 1999-2000 —– over 20 years ago!

For instance, only seven projects out of the 29 cleared during 1988-89 were implemented. While 17 projects worth investment of Rs 26.40 crore were dropped, five projects worth Rs 15.79 crore are still “under implementation”–— for 22 years! Similarly, as per the official record, 22 projects cleared in 1991-92 worth investment of Rs 103.90 crore are still being “implemented” even after 18 years.

According to the government data in Deccan Herald’s possession, out of the 4,526 projects worth Rs 68,119.91 crore that were cleared between 1988-89 to 2009-10, only 1,311 projects worth Rs 18,301.78 were implemented.  A whopping 2,699 projects worth Rs 43,533.85 crore are “under implementation”, while 445 projects worth Rs 5,492.65 crore are dropped and the State has no information about 72 projects worth Rs 791.84 crore.

The data also reveals that these projects were to generate employment for about 21 lakh people but with the majority of the projects either dropped or “under implementation”, only 3,77,951 jobs were created.

Land locked

Further, ironically, for a State that has been known for losing out on several projects, where potential investors had cited non-availability of land as a reason, it has never occurred, that retrieving land from these frozen projects could be of great significance.

For not only have these delayed projects failed to infuse the proposed money or create employment, but they have also kept precious land unutilised. There’s no need to mention that the government has also lost out on substantial money spent in developing these industrial plots. Besides losing out on projects, the State has faced criticism from industries over land prices quoted by the Karnataka Industrial Area Development Board (KIADB) being far higher than the market price and also over unavailability of land for expansion.

While the State has diverted time and energy in easing land acquisition norms and creating a land bank, retrieving land allotted to such projects —– which may be valued at least 10 times more than it was 22 years ago, as in some cases —– would have been a desirable solution. It would have also helped KIADB allot land for fresh projects at a cheaper price, as also saved the State the money spent on acquiring and developing new lands!

Assessing the district-wise and sector-wise data of the same, one will find that Bangalore Rural and Bangalore Urban districts have witnessed more of such cases: 464 and 550 respectively. Engineering and hotel/tourism sectors top the sector-wise chart with 526 and 230 respectively. But then, the ratio of projects “under implementation” against those cleared is not the same in all districts. For example, in Bangalore Rural district 77 per cent of the projects are “under implementation”, while in Bangalore Urban it is 42 per cent. Likewise, Ramanagaram district has an astonishing 89 per cent of the projects “under implementation”, while Mysore district has 70 per cent.

Inadequate regulation

According to senior officials from the industry department, any cleared project will be granted two years time for implementation, failing which, the government will issue a notice to the concerned firm/individual seeking an explanation. Or, the individual/the firm voluntarily need to file a fresh application seeking an extension of time for implementation. In either of the cases, the government is free to reject the approval and abolish the project if the reasons for delay are not satisfactory.

Then, how many years of extended time can a project get for implementation? Officials say “there are some cases where people have got extensions of a year more than once.” However, they add that since single window clearances are for small projects under Rs 50 crore, the gestation period for implementation should not be beyond four years or so. That, does not seem to be the case here clearly, with some projects “under implementation” for as long as 22 years and several others that the government has little knowledge about.

However, highly placed officials told Deccan Herald that the government has been working out ways to solve this problem and that newer systems are being put in place. “We have discussed this problem with KIADB, and will finalise on how we could retrieve the land,” the official said acknowledging that this is significantly affecting the State. “It is difficult for a particular government to set right problems that have existed for years now, but nevertheless, we are at it and results will show,” he added.

Establishing this fact, Minister for Large and Medium Industries Murugesh R Nirani said “The government has been paying surprise visits to all the industrial areas and keeping a tab on the situation. In fact, we have already acquired 200 acres of land from such projects and estimate another 300 acres.”

Even as projects that were dropped can be overlooked as routine —– because 100 per cent conversion rate is a rarity —– the projects “under implementation” and those that the government lacks information on are baffling. The government needs to act efficiently, lest ignorance will cost the State.