Centre avoids Mayawati, rolls out roads on its own

October 24, 2011

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NEW DELHI: With the Mayawati government refusing to play ball with the Centre on road development, the highways ministry is increasingly taking a short-cut. The ministry has been pushing for more projects under the engineering-procurement-construction model, under which it can get to work right away without state support. With elections ahead, it is becoming the road most taken.

The UP government has not yet signed the umbrella state support agreement (SSA) to facilitate highway development work, citing a “conflict of interest” with state highways. Under SSA, the state gives a commitment to maintain the law and order situation and to refrain from constructing any competing road.

NHAI has already invited tenders for pre-qualification for two EPC contracts in Sonia Gandhi’s constituency – Rae Bareli to Banda (140km) costing Rs 525 crore and Rae Bareli to Tanda (165km) costing Rs 692 crore. In these cases, the contractor will have to complete the projects within a stipulated timeframe and will also be responsible for their maintenance for at least one year.

Sources said there was a proposal to develop two more stretches under the same model, considering the slow progress any national highway development work has shown under the Mayawati regime. The NHAI, however, has favoured a build-operate-and-transfer (BOT-annuity) model for these stretches. “This is a tactical move and suits both Congress and NHAI. Since state support is crucial for annuity projects, the blame of any failure to take up the work will go to the state government or the contractor. On the other hand, this suits NHAI since it cannot escape accountability if any EPC contract gets delayed in such a VIP constituency,” said an industry insider.

NHAI has floated a tender for the two-laning project with paved shoulder for Rae Bareli-Jaunpur section of NH-231 (165.5km) on BOT (annuity) mode with an investment of Rs 626 crore. Two more projects will be taken up soon.

Under the new EPC model that is being used for two projects, NHAI will pay the entire amount to the contractor during construction period on a turnkey basis. In the case of BOT (annuity), the contractor raises investment for the project and the government pays back the principal amount with interest in instalments to the contractor.

“Since the SSA has not been signed with UP, we can’t delay the development work of highways in the state. We are hopeful of the state signing the agreement soon or at least extending support for early completion of these projects. We don’t see any reason why the state would not cooperate with the land acquisition process when the Centre is bearing the entire cost,” said a senior NHAI official.

Prior to Kamal Nath’s taking over as highways minister, the Centre used to sign SSA for each individual project. Nath had come out with the umbrella agreement plan to get it signed for all NH projects at one go. But UP had opposed this since it planned to build its own expressways including the Ganga expressway. Citing “conflict of interest”, the state government told the Planning Commission that a parallel NH would wean away traffic from state highways.

Source: timesofindia.indiatimes.com