Cabinet authorises Gadkari to decide on mode of developing road projects

28 August 2014

The union cabinet on Wednesday authorised the ministry of road transport and highways to decide on the mode of implementing road projects and to make amendments in the Model Concession Agreement in respect of national highway projects, thereby giving a free hand to minister for road transport and highways Nitin Gadkari to decide on the implementation of road infrastructure projects.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi on Wednesday gave its approval to the ministry of road transport and highways (MoRTH) to amend the model concession agreement (MCA) as may be required from time to time and to decide the mode of delivery of projects.

An official release said the decision is in line with the recommendations of the B K Chaturvedi Committee report, already accepted by the government in November 2009. The committee, in its report, has prescribed a framework to decide the mode of delivery and changes in the MCA through an institutional mechanism of the Inter Ministerial Group (IMG).

According to the committee, further amendments to the MCA are necessary, and the mode of delivery of any specific project in case the project is found unviable on build, operate transfer (BOT - toll and / or BOT- annuity), is to be considered, examined and approved by the IMG.

In case there is no unanimity in the IMG, the matter was required to be placed before the empowered group of ministers (EGoM) with the approval of the minister for road transport and highways. Since this EGoM was disbanded in 2012, such proposals had to be put up before the cabinet/Cabinet Committee on Economic Affairs (CCEA) for approval.

This, the CCEA found to be creating unnecessary burden on it with issues that are not commensurate with its stature and competence, apart from adding to avoidable delays in the implementation of the National Highways Development Project (NHDP).

This means that the ministry of road transport and highways will have the final say on project implementation.

According to the CCEA, this will help expedite implementation of road infrastructure projects in the country, thereby benefiting users of national highways from all over the country.

This will also help uplift the socio-economic condition of entire nation due to increased connectivity with far flung areas leading to increased economic activity.

Against the ambitious target for award of 9,500 km of road length for the financial year 2012-13, only 1,116 km could be awarded during the year by the National Highways Authority of India (NHAI) and only 1,436 km against the target of 4,030 km for the year 2013-14.

The shortfall has been attributed to an overall economic slowdown resulting in lack of availability of debt and equity in the market. Further, many policy issues pertaining to environment and forest clearances, provisions regarding loans to concessionaires and procedural complexities have also adversely impacted the award of road projects during 2012-13 and 2013-14.

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