Road Ministry gets cabinet clearance to push highway projects through

New Delhi: In a major decision that wouldhelp fast track highways projects, the government todayempowered the Road Transport and Highways (RTH) Ministry to decide on the mode of delivery and amendments in regard to agreements with developers.

“The Ministry was facing problems as regards to timely award of contracts, whether for BOT or PPP model. There was a difficulty in ascertaining how the project can be delivered. Now the Ministry has been empowered to take a decision in this regard,” Communications and IT Minister Ravi Shankar Prasad
said after the CCEA meeting.

The development comes in the wake of highways projects worth Rs 1,80,000 crore stalled on account of various reasons.

Prasad said the Ministry will now “take a decision as to which mode is the best for effective delivery of road project.”

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“A Committee headed by Cabinet Secretary will decide if there is any amendment in the MCA (Model Concession Agreement)” is needed, he said, adding, “the decision has been taken for fast-tacking of projects.”

“The CCEA, chaired by the Prime Minister Narendra Modi, today gave its approval to the Ministry of RTH to amend the MCA as may be required from time to time; and to decide the mode of delivery of projects,” an official statement said.

It said the users of National Highways from all over the country will benefit due to expediting of implementation of road infrastructure projects in the country.

This will also help uplift the socio-economic condition of entire nation on account of increased connectivity with far flung areas leading to increased economic activity, it added. As against the ambitious target for award of 9500 kms of road length for the financial year 2012-13, only 1116 kms
could be awarded by the National Highways Authority of India (NHAI).

Only 1,436 kms against the target of 4,030 kms for the year 2013-14 could be awarded.

The shortfall was primarily attributable to an overall economic slowdown resulting in lack of availability of debt and equity in the market and complexities in MCA.

BK Chaturvedi Committee, formed to look into the issue had in November, 2009 prescribed a framework to decide the mode of delivery and changes in the MCA through an institutional mechanism of the Inter Ministerial Group (IMG), which was accepted by the government.

According to recommendations of the Committee, further amendments to the MCA where necessary, and the mode of delivery of any specific project in case the project is found unviable on Build, Operate Transfer (BOT) (Toll) and/or BOT (Annuity), is to be considered, examined and approved by the IMG.

In case there is no unanimity in the IMG, the same was required to be placed before the Empowered Group of Ministers (EGoM) with the approval of the Minister for Road Transport and Highways.

Since this EGoM was disbanded in 2012, such proposals had to be put up before the Cabinet/Cabinet Committee on Economic Affairs (CCEA) for approval.

This unnecessarily burdened the CCEA with issues that are not commensurate with its stature and competence, apart from adding to avoidable delays in the implementation of the National Highways Development Project (NHDP).

Blaming the previous regime for award of projects without acquiring even 10 per cent of the required land and other groundworks, RTH Minister Nitin Gadkar last month had said as many as 189 projects with a cost of Rs 1,80,000 crore were stuck due to problems in land acquisition and delays in MCA among others.

In case there is no unanimity in the IMG, the same was required to be placed before the Empowered Group of Ministers (EGoM) with the approval of the Minister for Road Transport and Highways.

Since this EGoM was disbanded in 2012, such proposals had to be put up before the Cabinet/Cabinet Committee on Economic Affairs (CCEA) for approval.

This unnecessarily burdened the CCEA with issues that are not commensurate with its stature and competence, apart from adding to avoidable delays in the implementation of the National Highways Development Project (NHDP).

Blaming the previous regime for award of projects without acquiring even 10 per cent of the required land and other groundworks, RTH Minister Nitin Gadkar last month had said as many as 189 projects with a cost of Rs 1,80,000 crore were stuck due to problems in land acquisition and delays in MCA among others.

PTI