Govt to re­ward road de­vel­op­ers for faster ex­e­cu­tion TAK­ING THE HIGH ROAD

Plans to of­fer up to 10% of project cost as bonus to high­way con­trac­tors, com­pared to 5% at present

Business Standard - - ECONOMY - MEGHA MANCHANDA

In an ef­fort to fast-track the com­ple­tion of na­tional high­ways, the govern­ment plans to dou­ble the in­cen­tive for con­trac­tors fin­ish­ing their work ahead of sched­ule. The move is also ex­pected to cut the turn­around time for a road con­tract by 30 per cent.

An of­fi­cial aware of the de­vel­op­ment said con­trac­tors might be given a bonus of up to 10 per cent of the project cost for early com­ple­tion. Cur­rently, a con­trac­tor build­ing a less than 100-km road is en­ti­tled to a five per cent bonus for fin­ish­ing the work within the sched­uled time-frame.

Ac­cord­ing to the pro­posal, the govern­ment in­tends to bring down the con­struc­tion time of a high­way project with to­tal length of 100 km to 24 months from the cur­rent 36 months.

“The con­tours of the pro­posal are yet to be fi­nalised. There­fore, which project would at­tract how much in­cen­tive will be as­cer­tained later,” the of­fi­cial quoted above said.

A speed­ier ex­e­cu­tion of road projects will pri­mar­ily mean faster in­fra­struc­ture de­vel­op­ment in the coun­try. It is also ex­pected to cre­ate more job op­por­tu­ni­ties due to the labour-in­ten­sive na­ture of the work. In­dus­try ex­perts feel that timely clear­ances would play a vi­tal role in achiev­ing faster im­ple­men­ta­tion of con­tracts. “There are a num­ber of el­e­ments to it. Faster con­struc­tion also means that the op­er­a­tions would be­gin early

Projects com­pleted from 1995 till June 2017

Projects com­pleted on or be­fore time (from 1995 till June 2017) Im­ped­i­ment in com­ple­tion: De­lays in land ac­qui­si­tion, ob­tain­ing en­vi­ron­ment and for­est clear­ances, and poor per­for­mance of con­ces­sion­aire due to eco­nomic slow­down and the rev­enues would come at the ear­li­est,” Ab­hay Agar­wal, part­ner, in­fra­struc­ture & PPP, at EY, said, adding the govern­ment should en­sure that all the req­ui­site reg­u­la­tory clear­ances were in place be­fore­hand. Ex­perts say the ob­jec­tives of the pro­posal are achiev­able, but it will re­quire more than one con­trac­tor to com­plete the job. They also feel big-sized com­pa­nies will get ben­e­fited the most from the move as smaller con­trac­tors are not well equipped to de­liver within tighter time frame.

“You need mul­ti­ple con­trac­tors or de­ploy­ment of tech­nol­ogy for faster im­ple­men­ta­tion of the con­tract,” Agar­wal said.

Project de­lays in the past have im­pacted the high­way sec­tor’s growth, forc­ing the govern­ment to even can­cel con­tracts where con­ces­sion­aires were un­able to ex­e­cute them within the de­sired time frame.

Ear­lier this month, the Na­tional High­ways Au­thor­ity of India (NHAI) listed 20 high­way con­tracts, in­clud­ing those of L&T In­fra­struc­ture, HCC, Es­sel In­fra, MBL In­fra, and Soma En­ter­prises, for a pos­si­ble ter­mi­na­tion over de­lays in im­ple­men­ta­tion. These con­trac­tors have been man­dated to make a pre­sen­ta­tion to the cen­tral govern­ment for the de­lay. NHAI Chair­man Deepak Ku­mar said the au­thor­ity had writ­ten to the de­vel­op­ers to give rea­sons for the de­lay. The NHAI might bid out some of the projects afresh.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.