CCEA empowers Ministry of Road Transport for amending MCA

Nod comes after ministry put forward a proposal to give itself powers to decide on key issues

The Cabinet Committee on Economic Affairs today empowered the Ministry of Road Transport and Highways to amend the Model Concession Agreement (MCA) as and when required and decide the mode of delivery of projects.

The approval by CCEA, chaired by Prime Minister Narendra Modi, came after ministry put forward a proposal to give itself powers to decide on key issues, aiming to fasttrack award of projects and cut down on unnecessary delays.

Earlier, an Inter-Ministerial group took decision regarding modifications in the bidding documents for road projects as well as decides on the approvals for changing mode from private to government funding or otherwise. If the proposal got stuck in IMG, then it would go the Cabinet, which created unnecessary delays, according to a senior ministry official.

After the slowdown, there have been few takers for the road projects from the private industry, which necessitated the change of mode in various projects from BOT to EPC.

MCA is a legal contract which prescribes terms and conditions for executing a road project. NHAI, under the ministry of road transport and highways, award and construct national highway projects.

A government statement said the users of National Highways from all over the country will benefit due to expediting of implementation of road infrastructure projects in 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.

Due to economic slowdown over the last few years, the award of projects in roads and highways had slowed down, besides issues related to environment and forest clearances along with land acquisition problems.

Against a target of 9500 kms for 2012-13, only 1,116 kms could be awarded during the year by the National Highways Authority of India (NHAI) and only 1436 kms against the target of 4030 kms for the year 2013-14.

An overall economic slowdown, resulting in lack of availability of debt and equity in the market has been the main reason for the shortfall. Also, 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 these two years, the statement said.