With the Planning Commission and the Department of Economic Affairs, Ministry of Finance, calling the shots in almost all matters relating to the road sector, the National Highways Authority of India, which is responsible for development, maintenance and management of national highways, and the Ministry of Road Transport and Highways have become marginalized with virtually no authority to take major decisions.

In a recent letter addressed to the Road Transport and Highways Secretary Vijay Chhibber, NHAI Chairman R.P. Singh said that the problems facing the road sector could have been resolved if decisions were taken on time with regard to policy issues. He pointed out that even though the NHAI board had four secretaries to the government, its authority was limited. The full potential of the PPP model, he said, could not be realized as the MoRTH had no authority to make changes in the model concession agreement without consensus in the Inter-Ministerial Group.

Road_ProjectsMonitor“The NHAI and the Ministry have been literally marginalized with the Planning Commission and the DEA calling the shots. Such a situation does not prevail in any other Ministry. This needs to be quickly rectified in case we want quick progress in the road sector,” Singh said in the letter.

Highlighting the challenges confronting the road sector because of the economic downturn, aggressive bidding by developers, delays in grant of environmental and forest clearances, scarcity of aggregates and sand, land acquisition hurdles and lack of consistency between various wings of the government on policy matters, Singh said that the NHAI in order to revive the sector had sought easing of the exit policy so that concessionaires could divest their equity to private equity funds thereby bringing liquidity into the system and rescheduling of premium quoted by concessionaires in respect of highway projects. In both cases, he said, there was delay on part of the government in taking decisions.

“In case of exit policy, the proposal of NHAI was unfortunately massacred by the infrastructure experts of the DEA and the Planning Commission and what was finally approved by the Government was an unworkable policy for which there were no takers. You would recall that it was promised in the meeting with the Hon’ble Prime Minister last month by the Finance Minister that the proposal is being reviewed. We, however, are yet to see any change in the mindset of DEA and the Planning Commission,” Singh said in his letter.

Singh said that NHAI’s proposal on rescheduling of premium was being dealt with in the same manner as that on exit policy.

“Despite a specific Cabinet decision approving the rescheduling, every effort is being made to subvert the Cabinet decision. It is pertinent to note that after the Cabinet decision was taken on 8-10-2013, the Planning Commission issued an OM on 25-10-2013 literally criticizing the NHAI and the Cabinet decision,” Singh said.

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