NHAI wants farmer strike at Delhi-Haryana border treated as force majeure

Farmer agitation at the Delhi-Haryana border is being considered to be recognised as an “indirect political force majeure”.

In case this happens, it will enable road toll collectors on one of the country’s busiest highways to make up for the loss in revenue.

The national lockdown last year had been cited as a force majeure incident, which led the Union government to give the toll operators a similar dispensation across the country.

The proposal to allow “indirect force majeure” has been prepared by the National Highways Authority of India (NHAI) and has been put up for approval of the Union ministry of road transport and highways.

In a letter to the ministry, NHAI has said that the event should be treated as a political force majeure. Therefore, it said, the concession period for the company should be extended along with allowing interest payment of debt, according to the original financial package.

NHAI is of the view that the farmers’ agitation led to stoppage of toll at the plazas.

“It has been decided that loss on account of the above agitation is to be addressed according to provisions of the Concession Agreement,” NHAI said.

Certain clauses in the agreement state that if the project developer is unable to collect fees despite making best efforts or was directed by the authority to suspend the collection of levy, the concession period shall be extended by a period during which the concessionaire was prevented from collection of fee.

In case of partial collection of fee or where the daily collection is less than 90 per cent of the average daily fee, the authority shall extend the concession period in proportion to the loss of fee on a daily basis.

As far as interest payment of debt is concerned, it should be made according to the original financial package submitted at the time of financial closure.

The concessionaire should provide details of the operation and maintenance (O&M) expenses to the authority. For any other payment, the authority can take a call on a case-by-case basis.

“Care should be taken that the NPV (net present value) of all reimbursements of force majeure along with extension of concession period is capped to the maximum of toll revenue loss incurred during the force majeure period,” the letter said.

The authority also suggested that 75 per cent of the total claim amount arrived at may be paid immediately so as to keep the reconciliation margin.

The farmers’ protests began on November 25, 2020, when the farmers, mainly from Punjab and Haryana, marched towards the National Capital, demanding a complete repeal of the legislation. The three laws are the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; Essential Commodities (Amendment) Act, 2020; and Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.

The farming community feels that these laws will abolish the minimum support price (MSP) guaranteed by the government on select crops, leaving them at the mercy of big corporate houses.