With several projects hitting roadblocks due to inordinate delay in land and environmental clearances, the Ministry of Environment and Forests’ submission to the Supreme Court on Thursday will pave the way for kick-starting pending projects.
The Ministry of Road Transport and Highways (MoRTH) has already been deliberating over a policy change for the Built Operate Transfer (BOT) projects mired in controversy over land, environmental and other clearances. The Ministry is considering inviting bids only after obtaining mandatory land and environmental clearances for faster execution of highway projects.
At present, request for proposal (RFP) is given before getting these clearances.
“All necessary clearances for a project have to be obtained before the RFP is called by the National Highways Authority of India (NHAI).
“State related issues, in many cases political, also affect the projects. Before inviting bids, the authority will have to obtain the agreement details from State(s) which will obviously be backed by the Centre. For this discussions are at a preliminary stage with the Finance Ministry for a single-window system,” said a top MoRTH official. Inordinate delay in land acquisition, environmental, forest and other related clearances have become a roadblock in the construction of highways.
In a written reply to the lok Sabha early this week, Minister of State for Road Transport and Highways Sarvey Sathyanarayana admitted that development of highways has been a casualty of delay in land acquisition, environmental and forest clearances etc.
Alarm bells started ringing in the Ministry after key players like GMR, GVK, larsen and Toubro, backed out of projects citing inordinate delay in getting clearances. This affected projects nearly worth Rs 50,000 crore, and according to NHAI sources many more companies may withdraw from road projects.
GVK Power and Infrastructure and GMR Infrastructure has terminated contracts for major highways like the Shivpuri-Dewas Expressway in Madhya Pradesh and Kishangarh-Udaipur-Ahmedabad highway last month.
With big players exiting from major road projects, the officials also pondered over allowing an easy exit or changeovers for the developers from existing or under-construction projects.
The apex body of highway builders National Highways Builders Federation (NHBF) has written several times including very recently to Prime Minister Manmohan Singh, seeking a direction to NHAI to invite bids only after acquiring land and putting other clearances in place.
The NHBF stated there are projects where the NHAI is yet to specify dates for execution of work as there have been no environment and forest clearances. Several of them have problems related to land acquisition, they said.
Peeved by the dismal performance in road construction, the Prime Minister’s Office (PMO) early this week had discussed many issues and measures needed to resolve them. There was also a discussion over compensating the concessionaires in the event of delays due to clearances of projects besides a proposal that developers can change mid-way or be allowed to exit.
“We are also worried about another situation wherein one developer is involved in more than one project and then makes an exit from most of them citing a financial crunch. They invest simultaneously in projects like power, roads, shipping, etc where there is a coordination problem and then they seek financial review from the Government in other stakes. This also hampers other projects and the Finance Ministry is reviewing the matter, especially for those involved in roads and highway projects,” added the official.