Classify project disputes in monetary terms: roads panel

The B K Chaturvedi committee,set up by the Prime Minister to resolve issues in the roads sector,has called for a bucket-based approach to resolve disputes plaguing the sector.

The B K Chaturvedi committee,set up by the Prime Minister to resolve issues in the roads sector,has called for a bucket-based approach to resolve disputes plaguing the sector. In its second round of recommendations to the government,the committee has suggested three buckets for the size of claims by way of which the cases can be taken up by the National Highways Authority of India (NHAI) .

The three bucket sizes suggested are: disputes involving claims up to Rs 10 crore,between Rs 10-100 crore and those above Rs 100 crore. Sources said that the suggestion is to classify disputes after looking at the outstanding claims on the balance sheet of companies. The committee has further said that cases involving smaller amounts could be cleared by the dispute resolution board (DRB) if there is a unanimous opinion among board members. For cases where the amount involved is over Rs 100 crore,the authority may take legal recourse.

While developers say that claims close to Rs 10,000 crore are stuck at various levels within the NHAI,the authority has estimated disputed claims at Rs 3,500-4,000 crore. There are over 100 cases where the authority and the developer disagree over the bills raised by the private player. Cases have been pending for years and clearing them was one of the key demands of developers in the second stint of the United Progressive Alliance (UPA) at the Centre, a senior government official said.

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The committee has also looked into the taxation structure affecting the industry and has found that bringing consultancy firms under the ambit of the service tax is likely to have a cascading effect on project costs.

This amount cannot be recovered through toll as there is no freedom to raise the toll,which increases every year at the rate of the average growth in the whole sale price index (WPI). The toll policy also suggests a ceiling on the toll charged per kilometre for highways depending on whether they are two-lane,four-lane or six-lane.

However,the finance ministry has said that taxation would be addressed by the revenue department,which is working on the goods and services tax (GST). We have been told that exemptions of any kind do not fit into the GST reform regime, the official said. The draft report of the B K Chaturvedi committee Part II is under circulation for comments from various government departments and a final form is expected to be presented to the Cabinet some time in April,say officials.

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