Ministry seeks bigger NHAI board to fast-track decisions

December 3, 2013

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Road ministry wants to include the economic affairs secretary in the board of NHAI to help fast-track decision making on road projects

Ragini Verma

The current procedure to secure an approval for a change in the mode of bidding requires an additional nod of an interministerial group headed by the secretary, road transport and highways. Photo: Pradeep Gaur/Mint

New Delhi: The road ministry wants to include the economic affairs secretary in the board of the National Highways Authority of India (NHAI) to help fast-track decision making on road projects by removing a layer of approvals required from other ministries, two officials familiar with the matter said, requesting anonymity.

The road ministry has floated a cabinet note with a proposal to enlarge the NHAI board and empower it to decide on issues such as conversion of project models when bids fail. Currently, the board includes secretary, Planning Commission; secretary, expenditure (ministry of finance); and secretary, road transport and highways; as part-time members, in addition to the chairman and five members of NHAI who are full-time members.

“Since a lot of the PPP (public-private-partnership) projects have failed to get bids between last year and this year and now we have the Prime Minister’s approval to bid those projects as EPC (engineering-procurement-construction), to fast-track the approvals to change the mode of bid, we have proposed in a cabinet note that the NHAI board be enlarged and be given the power to make this decision,” said one the officials mentioned above.

Under the EPC model, the government pays a contractor a sum to build a project awarded through competitive bidding.

The current procedure to secure an approval for a change in the mode of bidding requires an additional nod of an interministerial group headed by the secretary, road transport and highways.

“The note has been sent to various ministries for comments and is likely to be sent for cabinet’s nod soon,” said the other official cited above.

Twenty road projects worth Rs.27,000 crore totalling 2,900km failed to receive any bids between March last year and October. NHAI has awarded only 123km of highway projects under the PPP mode this fiscal year. According to the revised target, the road ministry expects NHAI to seek bids for around 2,000km of projects under the EPC model.

In a 11 November review of the infrastructure sector, Prime MinisterManmohan Singh allowed the road ministry to pursue the EPC model after private firms shunned PPP projects.

“The NHAI board is already a high-powered board. In-principle steps to strengthen the board to take project-specific decisions are welcome,” said Pranavant, director at consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd. He uses a single name. “The board should be given the mandate to accord project-specific approvals like mode of implementation.”

Source-http://www.livemint.com/