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Thursday, January 31, 2013

First CCI meet directs oil, defence ministries to settle differences in one month
Issues stern warning on 39 stalled exploration blocks
Sanjeeb Mukherjee
The much-awaited first meeting of the Cabinet Committee on Investment ( CCI) that was expected to push $15 billion investment in oil exploration today ended with directive to the oil and defence ministries to sort out their differences in a month’s time on the stalled 39 oil exploration blocks.
Headed by Prime Minister Manmohan Singh, the committee has been vested with overarching powers to clear investment bottlenecks but contrary to expectations it could not settle the matter of cancellations of defence clearances but issued a stern warning to settle issues-related to the  39 stalled blocks.
"The oil and gas sector specifically from investment remit was discussed extensively. Certain problems were identified and the Ministry of Petroleum and Natural Gas has been tasked with responsibility of sitting down with the Ministry of Defence and resolving some of the problems which are there with regard to 39 blocks," I&B Minister Manish Tewari told reporters after the meeting.
An official statement said the CCI has directed that both the Defence Ministry and the Petroleum Ministry discuss the issue (on oil exploration blocks) in detail and formulate solutions within one month to resolve the issue.
Officials said the CCI would now take up the stalled power projects at its next meeting. With the aim of boosting investment climate in the country, the government earlier this month had set up CCI for fast-tracking clearances for projects costing more than Rs 1,000 crore.
The ministry of Petroleum had sought a directive from CCI to waive off stringent conditions attached to Defence ministry clearances for 32 blocks. Contractors had expressed their inability to comply with these clearances. For another 14 Blocks, the ministry of defence had labeled the areas as ‘No-Go’ for exploration activities.
Besides, the ministry of commerce had also objected to ONGC block where a special economic zone had been notified in Gujarat.
The Petroleum ministry had earlier managed to get 27 of the total 78 cleared by the defence ministry. Oil companies including state-owned ONGC and private-sector Reliance Industries and Essar had committed exploration programme after clearances by various government agencies, but clearances for 78 blocks was cancelled leading to stoppage of work.
Petroleum Ministry argued that contractors had made an investment $15 billion in these 78 blocks.
The ministry further said that non-clearance of the blocks could lead to contractual disputes and see exodus of foreign investment and loss of credibility for the government.
The CCI has also been mandated to consider and decide on measures that are required to grant or refuse approvals in identified sectors include simplification of rules and procedures followed by respective ministries and departments for decision making.
The committee would look into entire gamut of issues that hold up progress in infrastructure and manufacturing projects and suggests measures to ensure their speedy completion. It is a reformed avatar of the proposed National Investment Board.
Apart from Prime Minister Manmohan Singh, the CCI has 15 cabinet ministers as its members.  Environment and Forest Minister Jayanthi Natarajan,  Planning Commission deputy chairman Montek Singh Ahluwalia, power minister Jyotiraditya Scindia and information and broadcasting minister Manish Tiwari are special invitees to the CCI.