NHAI seeks ministry help to remove project hurdles

Written by Timsy Jaipuria | New Delhi | Updated: Feb 10 2014, 19:43pm hrs
With a slew of highway projects stuck midway, the National Highways Authority of India (NHAI) has brought the contractual problems in managing the public-private partnership (PPP) projects to the notice of the ministry of road transport and highways, saying these cause serious hardship to stakeholders.

NHAI chairman RP Singh has written to road secretary Vijay Chibber on the long-pending NH-1 project that is stuck in litigation, quoting it as an example of the problems faced by NHAI in contract management of PPP projects.

A PPP contract does not get implemented simply as a contract between the two parties. The concessionaire, apart from invoking its rights under the contract, drags NHAI under the writ jurisdiction of the high court. The indirect stakeholders can also resort to public interest litigation. The contract management of the project, therefore, becomes extremely difficult, said Singh.

Over the past two years, PPP in highways sector has been going through a rough phase where NHAI has approached the high courts and the Supreme Court to find a solution to the delayed development of various stretches. This includes some of the major projects like Delhi-Gurgaon stretch on NH-8 and Panipath-Jalandhar on NH-1.

In a project covering the Delhi-Gurgaon stretch, where NHAI has sent several termination notices and showcause notices to the developer, DS Construction, the authority is yet to get any respite even after two years.

There are around R17,000-crore worth road projects that are involved in arbitration and litigation cases. In many cases litigation has often gone in favour of NHAI asking the authority to take over but due to lengthy and complex legal process which the developer has used to its advantage leads to delays and becomes an excuse for the developer to stop work. Over the last few years many differences have emerged between the public and the private sectors in the public-private partnership contracts which has become a major challenge for the progress of highway projects, said a senior road ministry official.

Experts also say in the absence of a highway regulator, NHAI, which is also a signatory to projects, plays various roles and is addressed as the accused and defendant in several cases, where it can easily avoid to be one. It is also entrusted with making policy decisions on matters, creating a conflict of interest and highlighting the need for an independent regulator.

Around 80% of the projects (stuck in litigation) could have been avoided had the regulator been in place now. Private sector players do not want to get into a tussle with the NHAI and cannot fight them since they are the nodal authority," said a senior official of a highway developer. Talks are also on for having a separate Dispute Resolution Bill, which has been backed by all the infrastructure ministries and the planning commission.