Govt may compensate road developers for delay in clearances

The government may compensate developers of road projects for delays in obtaining environment clearances and land acquisition.

The Prime Minister's Office (PMO) in its meeting with the Ministry of Road Transport and Highways today deliberated on the issues impacting the sector.

"Many issues were discussed. One of the matters was compensation to the concessionaires for delays in getting environment and other clearances," said a source.

"It would not be for a particular project but all road projects in general," he said, without divulging the nature of the compensation.

The meeting, which lasted for more than an hour, also contemplated allowing easy exit to developer from the projects.

"If a company starts a (road) project and due to some change in the management or any other reason it wants to exit the project with their equity portion there should be an easy entry and exit option," the source said.

The meeting also discussed recognising the total project cost (TPC) estimated by the concessionaire. At present, NHAI estimated cost is recognised, which is backed by sovereign or government guarantee.

"It is likely that TPC estimated by a concessionaire is considered," he added.

The Road Ministry is also of the view that there should be regulation in the sector which would speed up work on developing highways.

 
The regulator will be expected to address issues such as delays in development of projects, and work on ways to remove hurdles in the sector.
 
This move may be linked to the recent move by some private companies exiting the projects on account of delay in various clearances.

The Planning Commission has also suggested setting up an independent regulatory authority for the road sector for determining tariff and ensuring service quality.