Nitin Gadkari aims to smoothen road for projects

New Delhi: Languishing road projects could be a thing of past, if the roads ministry’s proposal to terminate contracts if all conditions are not met within one year of signing the agreement becomes a reality.

Prime Minister Narendra Modi too has shown his concern over road projects remaining stuck due to poor finances or clearances. The ministry is planning to make amendments to the model concession agreement (MCA) for highway projects after the Cabinet in August permitted it to do so.

Putting a deadline for cancellation of the concession agreement is a primary concern. “At present, companies can sit on a project for as long as they want for want of some or the other clearance. There is no time limit till when such a delay should allowed,” a senior government official said.

Until now, any change in the MCA had to be approved by an inter-ministerial group comprising the road, finance and law ministries and a planning commission representative, and then by the Cabinet.

The ministry estimates that 189 projects worth Rs 1.8 lakh crore are stuck due to problems in land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail over-bridges.

The government has terminated 34 public-private partnership projects costing over Rs 38,500 crore through a “golden handshake”. These projects would now be implemented through the EPC – engineering, procurement, construction – route after preparing the detailed project report with updated costs, Nitin Gadkari road transport minister said at a recent conference.

The government’s move “will prevent projects from lingering on both sides”, said Manish Agarwal, leader, capital projects and infrastructure, at PwC India. “The highway authority will have to procure all the clearances and it could also deter people from placing unviable bids based on unrealistic traffic assumptions and then blame absence of clearances for delaying the project.”

Gadkari said work on several projects has not started even two years after companies got the financial closure because projects were bid out without acquiring even 10 per cent of the required land. The new rules require acquisition of 80 per cent of the required land before inviting bids.

The government is also trying to ease the process of getting wildlife, environment and forest clearances to expedite road projects. Of the 54 projects which were delayed due to lack of environmental clearance, 33 have got the permits. Approvals for rail over-bridges have been moved online.