The Hindu Business Line : Plan panel raises doubts on Sethusamudram

THE Union Planning Commission has raised doubts on the viability of the Sethusamudram Ship Canal project, and the Union Shipping Ministry will give a detailed reply to this, according to Mr D.T. Joseph, Secretary, Ministry of Shipping.

After clearance from the Planning Commission, the Ministry would seek the approval of Public Investment Board for the project, he told newspersons on the sidelines of a seminar.

On media reports that the Prime Minister Office (PMO) had raised concerns on the project, Mr Joseph said the Ministry had sent a detailed reply to the PMO.

The proposed project, on completion, will allow ships to sail from the West to East Coast and vice versa within India's own territorial waters, avoiding circumnavigation around Sri Lanka. It will also save 254 to 424 Nautical miles of sailing distance and up to 30 hours of sailing time for the ships.

It may be recalled that the Union Finance Minister, Mr P. Chidambaram, in his Budget for 2004-05 announced a Special Purpose Vehicle (SPV) to implement the project, which is estimated to cost between Rs 1,600 crore and Rs 2,000 crore.

"The SPV will raise funds for the project and the Government will participate in the funding through a mix of equity support and debt guarantee," the Finance Minister stated.

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