NHAI overhaul process put on fast-track to get the sector back on track

NEW DELHI: The proposed makeover of the National Highways Authority of India has gathered pace, with the government instructing the five-member committee set up for the purpose to submit its report by March 15, after which a cabinet note based on the report will be moved to seek empowerment of NHAI to fast-track resolution of disputes and get the sector back on track.

About 140 arbitration cases involving road contracts worth over Rs 21,063 crore are pending. “The long-pending revamp of NHAI is being put on the fast track now. The main idea is to streamline its operations,” a senior official said, adding that the government wants a mechanism for NHAI that results in lesser money spent on higher courts.

The committee, headed by former NHAI chairman Deepak Dasgupta, is expected to suggest ways for dispute resolution and better financial management of NHAI, among other issues.

The highways authority has so far settled matters in 66 contract packages amounting to Rs 15,079 crore. “Both kinds of projects — EPC (engineering, procurement and construction) and PPP (public-private partnership) — are in dispute right now. As new contracts get written it is extremely important that older disputes get resolved, bringing in the much required cash flow,” said Manish Agarwal, leader – capital projects and infrastructure, PwC India.

Failed arbitration cases have also been languishing in courts. NHAI has gone to the court in 199 cases while the contractors have done so in 37 such cases. NHAI has asked the government for more financial powers to resolve disputes internally.

“Arbitration process goes on and on for years with no resolution. The government needs to see why these disputes arise and then address those issues,” said Vishwas Udgirkar, senior director, Deloitte India.

The panel has also been tasked to address the issue of improving the approval and appraisal mechanism along with the human resource management of NHAI. The road ministry has terminated about 40 contracts during the current financial year while it still needs to take a call on the future of another 26-40 languishing projects.