Union Minister Nitin Gadkari today said a meeting of highway developers and officials from the NHAI and the road ministry will soon be convened for expediting highway projects. It assumes significance in the wake of highway builders’ body National Highways Builders Federation (NHBF) taking a strong exception to the National Highways Authority of India’s (NHAI) move to put in public domain the names of as many as 20 companies, including Larsen & Toubro and HCC, that were barred from bidding for highways projects and saying it had no authority to do so. “I will soon chair a meeting of highway developers and officials of NHAI besides the ministry to ensure that highway projects are expedited,” Road Transport, Highways and Shipping Minister told PTI. The minister said the government is also trying to reduce the turnaround time of highway projects to significantly enhance the construction pace. The highways building pace has reached 28 km a day now from 2 km a day when the BJP government had taken charge and the target is to take it to 40 km a day by March next year, Gadakri said. The meeting of the minister with highway developers and NHAI officials is expected to address the prevailing issue. But, when asked, Gadkari did not comment on NHAI’s move to upload a list of terminated contracts on its website which was later withdrawn. The NHBF had objected to NHAI uploading a list of highways contracts terminated since 2014 and withdrawing it.
The highway builders’ body in its letter to Gadkari and Principal Secretary to PM Nripendra Mishra said, “Even assuming that NHAI falls under the definition of a state instrumentality and thereby it has, powers to blacklist an entity flows from the executive power to Carry out the trade/business, it has no authority to upload such document in public domain.” The list, which the NHAI withdrew later, had details of 20 projects terminated by the regulator after April 2014 due to contractor’s event of default in which developers were asked to make any representation to NHAI headquarters by November 6. The NHAI has uploaded on its website names of companies including Larsen & Toubro, HCC and Essel Infra Projects and the period for which they were barred from bidding for projects. Repeated calls made to NHAI Chairman Deepak Kumar in this regard remained unanswered. The letter mentioned, “This unilateral action of NHAI has totally shaken the confidence of the evelopers/contractors community, especially when the Ministry of Road Transport and Highways is coming out with ambitious development of national and state highways including the Bharatmala scheme.”
None of the companies, who have been debarred for the next 2-3 years, were issued any kind of show-cause notice or given an opportunity to represent, before they were put to shame in public, the NHBF said. When contacted, infrastructure major L&T has said termination cannot be treated as its default. “L&T IDPL, a subsidiary of L&T, terminated a concession for the Pimpalgaon Nashik Gonde Project due to force majeure events arising from law and order issues as per provisions of the concession agreement, after completing the project,” a L&T spokesperson said. He said, “In our opinion the termination cannot be treated as a concessionaire event of default.” The infrastructure major said the matter is subjudice as it is under arbitration/conciliation. As per NHAI directions, the matter has been represented and a decision is awaited from them shortly.” CRISIL on the basis on NHAI list giving details of projects terminated due to contractor/concessionaire’s event of default said genuine contractors should not be penalised.
Jagannarayan Padmanabhan – Director and Practice Lead – Transport and Logistics, CRISIL Infrastructure Advisory, said that NHAI has taken a decisive step around issuing termination notice to concessionaires on some of the projects. He said, “This is positive for the sector and will help in moving past stuck/ stalled projects and in a way act as a deterrent for any future aggressive bidding by the developers. However genuine concessionaires should not be penalized which could caste a gloom over the sector which is just out of the woods and affect fresh investments by key players.”