Bank loan hitch: PM asks Road Ministry to approach EAC
Amid concerns over the reluctance by banks to give loans to infrastructure projects, Prime Minister Manmohan Singh has asked the Road Transport and Highways (RTH) Ministry to address the matter to the PMEAC so that the issue can be resolved.
New Delhi: Amid concerns over the reluctance by banks to give loans to infrastructure projects, Prime Minister Manmohan Singh has asked the Road Transport and Highways (RTH) Ministry to address the matter to the PMEAC so that the issue can be resolved.
The issue came up during a review meeting taken by the Prime Minister about the performance of key infrastructure ministries against the backdrop of his push for higher targets in these sectors so that higher economic growth could be achieved.
"Secretary (RTH) will send a note to Chairman, PM's EAC (Economic Advisory Council) on the issue of RBI's treatment of loans to the roads sector as unsecured loans," the PMO said in a statement after the meeting.
A number of private companies in the road sector have raised the issue of a conservative and rigid approach by banks in providing loans to the highways projects with the Transport Ministry.
Road Secretary A K Upadhyay had recently admitted that banks have become more conservative, rigid and restrictive in financing road projects which was holding back investment in the sector.
During the meeting, the Prime Minister also expressed confidence that the important ministries will be able to meet the targets.
The RTH told the PMO that it will "try its best to award road projects as per the original targets for FY 12-13 and will certainly cross 8,000 kms of awards this year by March, 2013."
Road projects of at least 3,000 kms length will be awarded under the new operate, maintain and toll (OMT) method by March, 2013, as per a statement from the PMO.
The Ministry has set a target of awarding projects for construciton of 8,800 km of highways for 2012-13.
Presenting the progress of the Port Sector during the meeting, the Shipping Ministry said it "will try to achieve the FY 12-13 target of awarding port projects with a capacity of 245 MTPA (million tonnes per annum) by March."