The ministry of road transport and highways is looking at further changes to the model concession agreement (MCA) — the standard bidding document — for roads in order to make it more private investor and developer friendly. The ministry is considering a proposal by way of which the “conflict of interest” margin may be raised from 5 per cent to 10 per cent and the termination clause may be made less stringent.

“We are looking at these changes and consultations with stakeholders are on,” minister for road transport and highways Kamal Nath said at the CII highways conclave in Delhi today. The ministry is also considering the setting up of a system of empanelled contractors, which will speed up the process for awarding road projects. It is understood that the empanelled list will include established players with strong track record so that when projects come up for bidding their bids can be considered in fast track mode. In the case of ‘conflict of interest’, a consortium of bidders must not hold more than 5 per cent in each other’s companies so as to prevent monopolistic practices from entering the road sector.

In order to make credit availability easier, the ministry is also in the process of floating a proposal to consider toll as a tangible asset so that banks can lend more easily to developers. This will, however, need the approval of the Reserve Bank of India. Later in the day National Highways Authority of India member (finance) A Didar Singh said that an exit clause in road projects had been suggested to the finance ministry and it was “in the orbit of consideration”.

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