Govt to set up Road Regulatory Authority

Financial stress, enhanced construction risk & contract management issues are best addressed by an independent authority

The government today said it would set up a road regulatory authority in 2013-14 to address financial stress, construction risk and contract management in the road sector.

"Challenges not envisaged earlier including financial stress, enhanced construction risk and contract management issues are best addressed by an independent authority...Hence the government has decided to constitute a regulatory authority for the road sector," Finance Minister P Chidambaram said while announcing the Budget.

The proposal to set up a regulatory authority in the road sector has been in the offing for some time.

The Ministry of Road Transport and Highways, earlier this month, had asked the government to re-examine at the proposal.

This move may also be linked to the recent trend of some private companies exiting projects on account of delay in various clearances.

At present, NHAI (National Highway Authority of India) along with the Road Ministry awards projects.

The key functions of the proposed regulator are likely to include tariff setting, regulation of service quality, assessment of concessionaire claims, collection and dissemination of sector information, service-level benchmarks and monitoring compliance of concession agreements.

The proposal would go to Cabinet for approval.

Overall, it is estimated that the infrastructure sector will need investment of USD 1 trillion (about Rs 55 lakh crore) in the 12th Five Year Plan period (2012-17).