Why are projects get­ting de­layed?

De­lay in clear­ances, lack of liq­uid­ity, and land ac­qui­si­tion issues are hold­ing up work

HT Estates - - NEWS -

Awhite pa­per on the Na­tional High­ways Author­ity of In­dia (NHAI) iden­ti­fies the main chal­lenges faced by the body while ex­e­cut­ing high­way projects across the coun­try. Chief among them in­clude de­lay in clear­ances – some as long as seven years, lack of liq­uid­ity and issues per­tain­ing to land ac­qui­si­tion.

Pres­sure was brought to bear on NHAI to award projects even when land was not ac­quired to the re­quired ex­tent, en­vi­ron­ment and for­est clear­ances were not in place, and other clear­ances were under process etc.

“Awards be­came a num­bers game. Lesser at­ten­tion was given to work­ing out a strat­egy to en­able timely com­ple­tion of projects,” says the white pa­per re­leased in June this year.

When pro­ject ex­e­cu­tion suf­fered con­tin­u­ous slip­pages, stress on the sec­tor be­came very high. NHAI had to go into fire-fight­ing mode, strug­gling in a los­ing bat­tle.

De­vel­op­ers lost op­por­tu­ni­ties and suf­fered under-util­i­sa­tion of de­ployed re­sources, len­ders had to cope with de­faults in debt ser­vic­ing, re­quests for debt re­struc­tur­ing, non-per­form­ing as­sets etc, the pub­lic could not avail the ben­e­fits of com­pleted roads and the gov­ern­ment it­self lost enor­mous rev­enue which it could have re­ceived had the projects been com­pleted on time and stake­hold­ers re­ceived their just dues.

Min­istries whose con­tri­bu­tion was in­te­gral to the timely com­ple­tion of projects went about their task un­mind­ful and un­con­cerned with the cri­sis they were cre­at­ing due to de­layed clear­ances/sanc­tions, se­cure since the sys­tem de­manded no ac­count­abil­ity from them.

Depart­ment of Fi­nan­cial Ser­vice (DoFS), MoF (min­istry of finance) took a con­tra­dic­tory stance against a wing of the MoEF (min­istry of en­vi­ron­ment and forests). While the MCA (model con­ces­sion agree­ment) ap­proved by DoE (depart­ment of ex­pen­di­ture) only re­quires that 80% land be made avail­able on the ap­pointed date, DoFS di­rected all state-owned banks that they shall not lend to road projects un­less 100% land is avail­able, the white pa­per states.

No pro­ject had 100% land and bank lend­ing to road projects was not given. Even though DoFS changed its stand later, the de­lay killed the vi­a­bil­ity of many in­fra­struc­ture projects and many among th­ese had to be fore­closed/ter­mi­nated by NHAI.

The min­istry of rail­ways has also been ex­tremely tardy when it comes to ROB/RUB (rail over bridges and under bridges) clear­ances, adds the white pa­per.

— Van­dana Ram­nani

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