57% projects stuck due to previous Govt’s policy paralysis, and for want of land acquisition
The Government on Wednesday came out with a White Paper on the collapse of road sector in India during the UPA’s tenure and held poor planning, award of projects without land acquisition, and delays in mandatory environmental clearances as some of the reasons for the dismal pace of highway construction.
The White Paper on the National Highways Authority of India (NHAI) released by the Ministry of Road Transport and Highways (MoRTH) on Wednesday said the NHAI was brought under undue pressure to award projects without land acquisition and other regulatory clearances.
Another document released by the Government indicated that 189 out of 332 NHAI projects across 20 States (57 per cent of the total projects), involving Rs 27,210 crore, are stuck in various disputes.
“Undue importance was given to award of projects... Awards became numbers game... The actions of the Department of Financial Services (DoFS) and Ministry of Environment and Forests (MoEF) brought the entire road sector to its knees,” said the White Paper.
launching a direct attack on the UPA Government, the document read, “There was a tendency among ministries to work in silos and alacrity to dominate over and preserve their individual turfs, even when it goes against national interest.”
Holding the previous Government responsible for “continuous slippages” due to award of projects without any strategy, the White Paper said, “NHAI had to go into a firefighting mode fighting a losing battle, the developers lost opportunities... lenders had to cope with defaults in debt servicing... public could not avail benefits of completed roads and Government itself lost enormous revenues.”
Stating that ministries, whose contribution was integral to the timely completion of projects, went about their task “unmindful and unconcerned with the crisis they were creating,” the paper accused the MoEF of a wrong interpretation of the Supreme Court order in a case and refusing environment clearances to projects.
It accused DoFS of taking a contradictory stance against another wing of Ministry of Finance leading to indefinite delays and termination of projects.
“While the Ministry of Corporate Affairs approved by DoE only requires that 80 per cent land be made available on the appointed date, DoFS directed all state-owned banks that they shall not lend to road projects unless 100 per cent land is available,” leading to no loan to projects, it said.
Stating that “it has become fashionable to cite aggressive bidding as the reason for the collapse of road sector awards,” MoRTH said the impact of aggressive bidding could have been contained if MoEF and DoFS had not acted in the way they did.
The paper accused that “officialdom” in the Finance Ministry, particularly the Department of Economic Affairs (DEA), was behind shooting down of NHAI’s proposals to deal with equity crunch in the sector.
Accusing the UPA Government of making the “autonomous character of NHAI whittle down,” it said a public-private partnership appraisal committee was set up by the Government in 2005 for project-wise approval despite the NDA Government earlier approving phase I and II of National Highways Development Project (NHDP) in totality.
Also, it said that the Cabinet Committee on Infrastructure in 2006 made a paradigm shift saying future awards in Phase III of NHDP would be on BOT toll basis affecting connectivity though it was done away in 2009.
It also alleged that despite a Government decision to provide entire cess money for National Highways till 2030-31, MoRTH diverted about Rs 7,000 crore till 2013-14 to other projects while “NHAI’s borrowing plans and its creditworthiness entirely hinge on the continuation of promised flows of cess.”
The White Paper has identified many operational impediments, including disagreement by even one member of the Inter-Ministerial Group on changes in concession agreement that requires the matter to be sent to the Cabinet, agitation against toll, land problems, equity crunch, regulatory hurdles, non-cooperation from some States and arbitrary action by Ministries and state governments.
The highways sector has hit a low for the last few years. After a dismal show in 2012-13, the Ministry had scaled down its projects award target by nearly half to 5,000 km 2013-14 compared to a target of 9,500 km in 2012-13.
The Ministry which had set a target of awarding 9,000 km of projects in 2013-14 could award less than 2,000 km projects by the end of the period.
In 2012-13, the Ministry was barely able to award 15 per cent of the targeted 9,500 km of highways on account of a number of factors including delay in clearances and equity crunch by developers.
Further launching a scathing attack on Ministry of Railways for delays, the paper said: “Ninety clearances from Railways are yet to come through; some of them are pending for as long as three years.”
It did not spare the Defence Ministry either by alleging that it delayed transfer of defence land and some clearances are pending for seven years.