Monday, October 27, 2008

67% projects in Karnataka are no-show

67% projects in Karnataka are no-show
2,555 Investments Okayed; Over 1,700 Yet To Show Up
Anil Kumar M | TNN

Bangalore: Is ‘Destination Karnataka’ more on paper than on the ground? A study of the large projects with lakhs of crores of investment announced over the past six years reveals that almost 67% of them are ‘no-shows’.
Every few months, government bodies like the singlewindow agency and the state high-level clearance committee (SHLCC) announce they have cleared a host of companies making investment in the state. It now transpires as many as 1,700 of the 2,555 companies that had been given the green light have given the state a red signal. The government is now desperately trying to woo them back. The commerce and industries department has dashed off letters to nearly 1,700 companies, seeking their response. This move, too, has met with a lukewarm response.
“After getting clearance, which involves approving hundreds of acres of land, particularly in and around Bangalore, companies are nowhere in the picture. They just cannot lock the land. We want these companies to start setting up their units. While a very few companies of the 2,555 cleared in past six years have confirmed establishment of their projects, a majority of them are yet to communicate on their status report,’’ a senior official said. The government also wants to know if these approved units are facing any hurdles in setting up their projects after getting clearance.
Karnataka adopts a twopronged approach to clearing projects. If the project is worth more than Rs 50 crore, SHLCC headed by the chief minister clears the proposal, while the single-window clearance committee headed by principal secretary of commerce and industries department clears projects worth between Rs 3 crore and Rs 50 crore. SHLCC has cleared 302 proposals, while SWCC has approved 2,468 projects over the past six years, worth Rs 4,00,525 crore. Barring 186 companies that have been cleared in the past 10 months, the department has written letters to most of the companies that have been approved in the past six years.
A company representative, whose project has been cleared by SHLCC, maintained that as the gestation period for very large projects is more than three years, a decision can be made after a couple of years from the time of approval.
During 2007-08 alone, the state had announced that it had attracted a whopping Rs 1.61 lakh crore of investment from 108 industries through SHLCC, including 25 IT Park projects worth Rs 36,194 crore. In addition, 22 IT/ITeS projects involving investments of Rs 13,465 crore have been given the nod by the government.
Ten energy companies have been cleared with promised investment of Rs 35,332 crore in various power projects in the coming years. Steel cos ready to invest in state
Bangalore: Foreseeing the huge potential in the steel sector in Karnataka, nine iron and steel companies have come forward to pump in a large sum of about Rs 27,300 crore to set up iron and steel units.
These are some of the very few promising projects cleared by the Karnataka government which are on course.Even integrated township projects amounting to more than Rs 5,608 crore have been approved. The cement sector’s promised investment is over Rs 10,972 crore. Some of the big projects cleared in the past one year: Mumbai-based SKIL Infrastructure’s investment in a multi-product SEZ worth Rs 17,909 crore in Nandagudi (Hoskote), a proposal from a Mumbai-based company to set up multi-product SEZ worth over Rs 4,164 crore in Chitradurga, a Rs 3,384-crore airport-based SEZ in Bangalore.
Against this backdrop, it is interesting to note that the state government intends to hold yet another global investors’ meet in Bangalore in mid-January with the intent to woo thousands of crores of investment to the state.

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