Litigation in road projects up after new land buy law

NEW DELHI: The new land acquisition law has not just pushed up the cost of acquiring land for road projects but has resulted in a spike in litigation as those affected are seeking higher compensation under the new legislation, even if the process had started under the old dispensation, National Highways Authority of India chairman Raghav Chandra said.

"There are several stretches where compensation has been paid for some portions according to the earlier law. Now, when we are paying higher compensation for the remaining portion, the others are making claims to get similar compensation. It's natural that farmers or any land owner, who is losing the property, wants maximum compensation. This needs to be addressed," Chandra told TOI.

Although the pace of land acquisition has increased, as reported by TOI on September 26, compensation has also increased by two-and-a-half to three times. But there are some legacy issues, and the number of cases seeking higher compensation has increased.

In the past land acquisition has been a major headache for the government and NHAI, and often projects have been held up due to delays. The Centre has initiated a number of steps In recent months, backed by 21cabinet decisions, for highway construction to pick up. At least 12,900 km has been awarded under NDA-II in 20 months as against about 5,600 km during the last two years of UPA-II.

Chandra said the road development agency was pushing states to speed up work and was even looking at a fund to incentivize the top performers. "We may create a fund for them, which they can use for special works on national highways falling under that state."

Chandra admitted that lenders are not on board regarding certain issues related to financing, which is now getting NHAI's top priority. For instance, the decision to get NHAI to infuse equity for reviving and completing languishing projects has not taken off as the authority has been given the first right on toll revenues, something that banks are not comfortable with.

"The spirit of the government's decisions is abundantly clear, but the fine print is still not very helpful... I have written to secretary financial services giving representative list of nine projects where bankers have put close to Rs 6,000 crore. Unless banks agree to the laid down conditions or these are amended further, we may be forced to terminate the contracts. Lenders will lose their entire loan amount. If they allow us to put equity of about Rs 2,500 crore, they can recover their loan amount after we get back our investment," Chandra said, adding that he was also in dialogue with lenders to work out a solution.