Action against developers stayed till cases reviewed ›

I had a meeting with the NHAI chairman... where it was decided that till such time each case is examined, they (developers) will not be debarred from bidding NITIN GADKARI, Union road transport and highways minister

NEWDELHI: The Union road transport and highways minister Nitin Gadkari on Thursday directed the NHAI to “put in abeyance” any further action against developers of 20 road projects, whose contracts were terminated, till each case was reviewed on its “own merits.”

The contracts were terminated by the National Highways Authority of India (NHAI) in April 2014 on the ground that concessionaires’ defaulted on their contractual obligations.

The developers were given time till November 6 to make their representation on the termination notice, following which a decision was to be taken for debarring them from bidding in future projects for three years.

Calling the NHAI’S decision as “hasty”, Gadkari told HT, “Such type of action is neither in the interest of the sector or the country. It will have an impact on the economy and also send a wrong message at a time when we are promoting ease of doing business.”

“I had a meeting with the NHAI chairman and road secretary today (Thursday) where it was decided that till such time each case is examined, they will not be debarred from bidding in future projects,” he added.

Some of the developers whose contract were terminated, such as Larsen &Toubro and Hindustan Construction Company (HCC), have already challenged the NHAI’S decision and gone into arbitration.

In Thursday’s meeting, it was also decided that in cases where the construction companies have gone into arbitration, the NHAI will decide the case only after completion of the legal proceedings, unless the adjucating body/court had refused to intervene or decline any interim relief on the termination orders.

Pravesh Minocha, group managing director, Feedback Infra, an infrastructure consulting firm welcomed the ministry’s decision. “At a time when the government has launched the massive ₹6.92-lakh crore highway expansion programme, debarring companies from bidding in future projects would have a negative impact on the sector. Private investors are not coming in as yet and you are scaring away the existing ones,” he said.

The 2017 Economic Survey report had said that highways construction was one of the sectors that had witnessed about 10% growth in the first half of the current fiscal. The NHAI had uploaded the list of 20 terminated projects on its website on October 30, 2017. But it withdrew thelist three days later after protest from the National Highways Developers Foundation, which said that the move amounts to “public defamation.”