Road Ministry asks NHAI to resolve row with road developers

April 29, 2013

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By YASHODHARA DASGUPTA, ET Bureau | 25 Apr, 2013,

Road Ministry asks NHAI to resolve row with road developers

NEW DELHI: The road ministry has asked the National Highways Authority of India(NHAI) to expedite the process of resolving disputes with highway developers by the independent committee set up under the Authority to review individual cases and send its recommendations to the NHAI board.

Since its inception earlier this year, the committee has taken up seven cases of pending claims but is yet to resolve any of them, said ministry officials. At present, about 227 cases with 10,963 crore of developer dues are stuck under arbitration or are pending in court.

“We have asked them to meet more frequently and would like them to sit each week, so that they can resolve multiple cases swiftly,” said a highways ministry official, who didn’t wish to be named. Many of these claims are due to delays in land acquisition, change in scope, officials’ reluctance to sign off on deviations and cost escalations permitted under the contract, restricting the ability of developers to bid for new projects.

In November 2012, the NHAI board had approved a three-stage system to resolve disputes under which pending claims and cases are first referred to a committee of chief general managers from NHAI. Then it is taken to the three-member independent settlement advisory committee ( ISAC), which reviews the recommendations and can communicate and negotiate with contractors. Their recommendations are then taken to the board for approval. The seven pending claims are currently stuck at the second level. The ministry hopes to fast-track settlement of claims, some of which go back to projects awarded as far back as 1997-98, and release the much-needed capital – stuck in financial disputes – back into the funds-starved sector.

Source-http://economictimes.indiatimes.com