Road disputes,NHAI funding plan on EGoM agenda today

The empowered group of ministers (E-GoM) for roads is expected to finalise a mechanism for resolving disputes between developers and the National Highways Authority of India that have locked up investments to the tune of Rs 11,000 crore. In its meeting on Friday,the E-GoM will likely approve the financing plan prepared by the NHAI for the national highways development programme 2011-2012,according to officials associated with the process.

The B K Chaturvedi Committee constituted to look into the fast track development of national highways in 2009 had recommended that disputes should be settled on the case-to-case basis by an independent expert group. It had also said that for disputes where the amount claimed was less than Rs 10 crore or 5 per cent of contract price (whichever is lower),the NHAI may offer a “one-time settlement of pending disputes”. For cases involving an amount between Rs 10 crore and Rs 100 crore,the committee had suggested that the award of arbitral tribunal should be accepted.

For cases involving over Rs 100 crore,the committee had recommended that NHAI may carefully consider the award of tribunal before challenging in the Court in order to reduce litigation and delays. It had said that NHAI may take up with the arbitral tribunal for early hearing and disposal of all pending cases which would enable the authority to make significant savings in interest payment on the disputed amount.

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However,after seeking views of all stakeholders on the implementation of the recommendations a number of divergent opinions had cropped up and the matter has been referred to the E-GoM yet again. Even the Solicitor General had suggested a different mechanism,say officials.

The disputes involve developers such as L&T and Gammon. There are over 530 disputes pending in courts and above 1,000 disputes pending in arbitration tribunals. The amount involved in a single dispute ranges from less than Rs 1 crore to Rs 69 crore.