These plans will replace the earlier programme of Bharatmala Pariyojana to improve connectivity within the country.
The new programme will give parameters for selecting of roads as national priority, which will be followed with changes in the Model Concession Agreement for quick infrastructure creation and minimising contract disputes and litigation. “Future projects will be awarded under a new scheme. It will be different from Bharatmala,” a senior government official said.
Contract changes in the works
Besides the change in approach, tweaks in Model Concession Agreement (MCA) for all road building contracts are being readied to minimise contract disputes and litigation. “We have studied court cases where government lost out to contractors. Provisions that were found to be unfavourable for government and driving unnecessary litigation will be plugged. The law will be tightened for better project implementation and ensuring better quality roads,” a third official said.
According to a proposal under consideration, there shall be no arbitration for a dispute involving a claim value up to ₹50 lakh. Further, for cases involving higher amounts, neither government nor concessionaire shall be entitled for any pre-reference or pendentelite interest. In addition to this, it has also been suggested that insurance during the concession period (to compensate in cases of project failure) should also include the government arms as joint beneficiaries.
Bharatmala progress
According to official data, the country has been annually constructing over 10,000 kilometres of national highways (NH) since the launch of Bharatmala in October 2017. The goal of the scheme was to build 74,942 kilometres (km) of NH, of which 34,800 km was approved as the first phase for development (till September 2022) against ₹5.35 lakh crore investment. Further, contracts for 27,384 km of highways have been awarded under Bharatmala and the constructed length stands at 15,045 km. While the scheme successfully drove the country into a faster pace of highway construction, there have been concerns around escalated expenditure.
BOT approach It is now expected that any remaining NH contracts awarded this fiscal will be under the Build Operate Transfer (BOT) model which entail negligible financial outgo from the exchequer. “The Centre is giving an impetus to BOT projects about 11 stretches aggregating to ₹22,000 crore have been put up for bids,” said Jagannarayan Padmanabhan, Senior Director – Transport logistics and Mobility – CRISIL Ltd.
