New Push for FDI: Board to be set up for one-time nod to oil and gas projects
New Delhi: Realising the dampening impact on investments due to problems on account of regulatory nod, the government has decided to set up a high-level board to ensure speedy "one-time" clearances to oil and natural gas projects, 70 of which have been affected so far.
The Project Clearance Board, to be headed by the Cabinet Secretary, will be on the lines of the Foreign Investment Promotion Board (FIPB) which clears FDI proposals in sensitive sectors.
The decision to set up the Board was taken at a meeting held by the Prime Minister's Office to review progress on various oil and natural gas exploration projects under the New Exploration Licensing Policy (NELP).
The Board will include representatives from the Ministries of Home, Defence, Environment & Forests, Commerce, Coal, Department of Space and other infrastructure and energy related Ministries/Departments, a PMO statement said.
"In a meeting held in PMO to review the status of clearances of Oil & Gas Blocks awarded under the NELP, it was decided that a Project Clearance Board along the lines of FIPB, would be constituted under the chairmanship of the Cabinet Secretary for review and issue of one-time clearances, including security clearance," it said.
The statement noted that "one of the biggest hurdles" to speedy implementation of projects is the delays faced by project implementing agencies and private firms with concessions, in obtaining security related clearances from many agencies.
It cited the example of progress in exploration work in over 70 oil blocks awarded under the NELP which has slowed down due to lack of clearances.
There are similar problems in other areas such as Ports and infrastructure sectors, the PMO pointed out.
The PMO said the decision to set up the Board was taken as there is "a need to have an institutionalised mechanism for issuing clearances in a time-bound manner".
There is already a model for clearing foreign investments in the form of the FIPB where foreign investment clearances are given through regular meetings of the FIPB under the Department of Economic Affairs, it said.
"A need for a similar mechanism was felt for other clearances so that the issue of delayed clearances is resolved," the statement said.
The Board will meet on a monthly basis to review the status of clearances for energy and infrastructure projects and expedite issuing of security and other clearances.
Ministries would report to this Board the status of issuing of clearances after following their internal due diligence processes.
For the Petroleum & Natural Gas sector, the special cell for clearances being set up in DGH will act as the secretariat, the statement said.
A common mechanism for all sectors will be evolved soon and the Board will be set up in the coming weeks.