UP agrees to sign SSA with road ministry

Written by Deepa Jainani | Lucknow | Updated: Feb 19 2014, 11:04am hrs
Hectic parleys by the project monitoring group (PMG), under the Cabinet Secretariat, have finally succeeded in breaking the ice between the ministry of road transport & highways (MoRTH) and Uttar Pradesh government. The state cabinet has agreed to sign the umbrella state support agreement (SSA) with MoRTH, which will give a fresh lease of life to 13 road projects worth more than Rs 12,000 crore in the state. With this, UP will become the 27th state to sign the SSA.

This will also clear way for 6 other NHAI projects in the state, which have not been cleared by the state government.

Speaking to FE, a state government official said that the SSA is expected to be signed shortly for 13 out of the 19 NHAI projects in the state. The state will definitely benefit once these projects are completed. They will not only bring about financial development but also social upliftment along the areas that they would pass through, he said.

The SSA binds the state government for providing land, environment and mining-related clearances, helps in providing utility services and enforcing law and order, besides agreeing to the no-competing roads clause.

It may be mentioned that the UP government had refused to sign the SSA with MoRTH since 2010, when the then chief minister, Mayawati, had taken offence to the MoRTH not clearing the expressway projects envisaged by the state government at that time. In a retaliatory mode, she had refused to sign the SSA which would have paved the way for the NHAI projects in the state. And the bone of contention was the clause in the SSA which said that no-competing roads be allowed to come up near the NHAI highways. This, the respective governments of Mayawati and Akhilesh Yadav, felt, takes away the states right to plan and execute its own projects.

As a consequence, in the absence of SSAs, banks had refused to further finance the NHAI projects commissioned between 2009 and 2011, which were in various stages of execution. A PMG, headed by Additional Cabinet Secretary Anil Swarup, was then set up to track stalled investment projects, both in the public and private sectors, and remove the implementation bottlenecks in these projects on a fast-track basis.

Once the SSA is signed between the state and the Centre, it will revive hopes for the 13 languishing national highway projects. Lenders of these projects have also been writing to the Centre as they had refused to further lend loans because of NHAIs failure to obtain the statutory state clearances.

The reason NHAI has been persisting with its demand of the state government signing an umbrella SSA is that many central projects are in various stages of construction, with the banks refusing to lend them fresh loans because the state was unwilling to sign the SSA, which, in effect, meant that the state government would not build any competing road in the vicinity, which would adversely affect the toll revenues of these projects. While the state government appreciates the road development done by the NHAI, it does not want to cease its rights to build roads on sectors where it thinks it is due.