Centre plans to put in place roads regulator before Budget FY15

The road regulator planned by the ministry, meanwhile, will have adjudicatory powers to deal with concerns such as contract disputes

The roads ministry is considering putting in place a regulator for the sector before Union Budget 2014-15. It would also review the target of awarding 8,000 km this year.

“We are looking to put in place a regulator before the next Budget. The draft Bill is ready; the regulator will be an authority that can make judicious and arbitrary decisions. Projects are often spread over 25 years. Basically, the regulator will look at concerns such as debt management and restructuring of projects,” said Oscar Fernandes, Union roads minister.

He added in the past few years, land acquisition activities had increased, while private participation in the sector had slowed.

“Recently, we had called for bids and found nobody willing to take up projects, as financial institutions hadn’t shown interest. On our part, land acquisition activities have been going on as scheduled and we have acquired at least 90% of the target,” he said.

The road regulator planned by the ministry will have adjudicatory powers to deal with concerns such as contract disputes and renegotiation of future contracts; the decision of the regulator will be legally enforceable.

Last year, the Union finance ministry had announced a roads regulator would be set up this year, as a number of projects had been facing legal issues. The move to set up a regulator was also aimed at bringing clarity on the entry and exit of developers in the case of public-private partnership projects.

“The regulator will look at pre-construction and post-construction works, as well as the concerns regarding those,” Fernandes said. At a meeting on Monday, Prime Minister Manmohan Singh is expected to review the progress of road projects in the country.

Through the past few years, India’s roads sector has been facing constraints, primarily due to the lack of participation of the private sector and the fact that lenders are staying away from these projects.

Though the National Highways Authority of India (NHAI) had proposed road developers be allowed to exit projects and sell their equity, the policy has found no taker so far.

A policy regarding the rescheduling of premium is being studied by a panel under C Rangarajan, chairman of the Prime Minister’s Economic Advisory Committee; a decision on the policy is expected next month. It is expected premium worth Rs 1,51,000 crore would be rescheduled by the finance ministry.

On the issue of quadricycles, Fernandes said a technical committee was studying some of the objections regarding the safety of these vehicles. At a meeting of ministry officials and representatives of automotive companies in September, a few companies, including Tata Motors, had raised concern regarding the safety of these vehicles.

Earlier, Arvind Mayaram, secretary in the Department of Economic Affairs, had said public-private partnerships in the roads sector would be revived in the next six-eight months.