Minister for Roads and Highways Nitin Gadkari is seeking the freeing of his Ministry from approaching the Cabinet each time the contract for building highways has to be altered. The Ministry is planning to approach the Cabinet with a note in this respect, highly placed sources said here on Monday.
“For every little thing we have to go to the Cabinet for approval. Many of these are practical decisions. Our Ministry has enough experience on the ground to run public-private projects but in doing so we face practical difficulties which can be resolved here itself instead of approaching the Cabinet,’’ said the official.
The Ministry believes the model concession agreement (MCA) which is signed with private developers should not have gone to the Cabinet in the first place. Rather, the Union Cabinet should be approving the broad principles while leaving the Ministry concerned to do the necessary fine-tuning, keeping in mind the actual field conditions.
This freedom will also leave the Ministry with enough elbow room to come up with contracts that encourage builders to be concerned about social aspects as well. Giving an illustration, the official said if the builder takes measures that halve the death rate on a highway, the Ministry should have the flexibility to extend the concession period by one year as bonus.
Or, says the official, suppose there is no revenue earning. Instead, the developer is told to build the road and given a certain lease period to recoup his expenditure. “Globally this is the practice [of flexibility] and the same amount of transparency and oversight will be there,’’ he reasoned.
“The fact is that PPP is not working. The market sentiment is down. This is the time to tune the mechanisms by having different alternatives to encourage the bidding process,’’ he summarised.
Simultaneously, the National Highways Authority of India (NHAI) is also seeking greater decision-making autonomy on the ground that its role has changed with the trend towards greater private partnership in highway projects.
Both the Ministry and the NHAI are making the pitch for greater autonomy against the backdrop of uncompleted projects worth over Rs.80,000 crores. With a new Government in saddle, NHAI had released a white paper in which it had asked for functional autonomy and the freedom to alter MCAs.
The previous United Progressive Alliance Government had been lukewarm to these requests as it did not feel comfortable in giving such wide ranging autonomy to a single Ministry. At that time, officials were of the view that a different MCA for each project, as the Ministry was essentially seeking, might alter the balance of risks and benefits in favour of the developer. With Mr. Gadkari favouring flexibility to fix the roads, ports and inland waterways sectors, the coming days will see how much of autonomy will the Cabinet be able to impart to the Ministry and NHAI for the roads sector.
