Rs 26,556 cr highway funds embroiled in disputes: Gadkari

A whopping Rs 26,556 crore is embroiled in disputes between National Highways Authority of India (NHAI) and road builders, the government today said.
"An amount of Rs 26,556 crore is held up in disputes between NHAI and concessionaires," Road Transport and Highways Minister Nitin Gadkari told in a written reply to Rajya Sabha.
Gadkari said out of the disputed amount, disputes involving Rs 22,773 crore were pending for arbitration while another Rs 3,783 crore was involved in court cases.
For quicker resolution of disputes and one-time settlement of long pending claims and to address issue of fund constraints in highways sector, NHAI board has recommended a three stage dispute resolution mechanism, he said.

"Accordingly, 3-Chief General Manager Committee and one Independent Settlement Advisory Committee (ISAC), headed by a retired Judge of Delhi High Court has been constituted," he said.
Gadkari said when ISAC started functioning in March last year, disputes in 225 contract packages amount to Rs 17,489 crore was pending.

"Till date on the recommendation of ISAC, 45 contract packages involving 24 contractors/concessionaires have been resolved amicably after negotiation and settlement of Rs 922 crore has been given as against claims amount to Rs 9,860 crore," he said.
In reply to another query in the Upper House as to whether the government is considering to garner Rs 1 lakh crore for highway projects in the country, he replied in the negative.

However, the Minister addressing a conclave on July 3 had said that the Narendra Modi-led government will initiate measures to turn-around the Highways sector in 2 years time by garnering funds to the tune of Rs one lakh crore in a year.
"I will prepare a blue print for road sector reforms in a month. I will arrange funds to the tune of Rs one lakh crore in a year... The results will be out in two years," Gadkari had said at a conclave.
On equity crunch, Gadkari in the reply today said, "Availability of the equity has emerged as a constraint in public-private-partnership (PPP) projects. The general economic downturn has caused revenue realisation of the concessionaires lower than estimated levels."

He said reduced revenue realisations have, in turn, affected debt servicing by concessionaires.
"This has caused widespread default in many debt accounts. Lenders are also increasingly reluctant to provide debt to highways projects on PPP mode. Hence many projects bid out went without eliciting response from bidders.
Talking about the measures to address the issue, he said on the insistence of the Ministry, the Reserve Bank of India has advised all scheduled commercial banks to treat road sector debt as secured within the limit of 90 per cent of debt due enabling banks to allocate a large portion of lending to road sector and also to reduce the cost thereon.