With general elections not too far away, the proposal for setting up a regulatory authority for the road sector may not see the light of day any time soon.

In February this year, while presenting the Union Budget for the year 2013-14, Finance Minister P. Chidambaram had announced the Centre’s decision of constituting an independent regulatory authority for the road sector.

“The road construction sector has reached a certain level of maturity. But it faces challenges not envisaged earlier, including financial stress, enhanced construction risk and contract management issues that are best addressed by an independent authority. Hence, government has decided to constitute a regulatory authority for the road sector,” Chidambaram said in the Budget speech.

At present, the National Highways Authority of India, responsible for development, management and maintenance of national highways, functions as an executing agency as well as regulator. The dual role is perceived by many as contradictory.

The Ministry of Road Transport and Highways created a task force in April to expedite the setting up of the regulatory authority for the road sector. The task force released its draft report on the constitution and structuring of the proposed regulator last month.

The draft report suggests setting up the proposed regulator through an ordinance/executive order and then subsequently converting the same into an Act of Parliament for adequate enforceability and acceptance.

The regulatory authority, in addition to facilitating the expeditious implementation of the National Highways Development Project, would address the concerns of all stakeholders including road users.

A source associated with the road sector told Projectmonitor that in the current scenario, with general elections due in less than a year, setting up the regulatory authority could be an uphill task.

“The process of setting up the regulatory authority, which includes seeking the Parliament’s nod and selection of members, would take more than a year after the Cabinet’s approval. The question is whether the government has enough time in its hand,” the source said.

Interestingly, the Planning Commission is opposed to the proposal for setting up an independent regulatory authority for the road sector.

“An independent regulatory authority would dilute the powers of the Planning Commission. Currently, the Model Concession Agreement as well as rules and regulations concerning the sector are drafted by the Planning Commission. Once a regulator is in place, these could very well get challenged,” the source said, adding that the proposal for setting up an independent regulatory authority might not find favor with the NHAI for the same reason.


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