Rs 90 bn locked in cases over road projects

A whopping Rs 90 billion (Rs 9,000 crore) is locked in arbitration cases related to road projects in India,according to a new World Bank study released in Delhi today....

A whopping Rs 90 billion (Rs 9,000 crore) is locked in arbitration cases related to road projects in India,according to a new World Bank study released in Delhi today. Releasing its new report on Indian road construction industry,the Bank said that about 40 per cent projects in India suffer cost over-runs of 25-50 per cent and 70 per cent projects are completed with time over-runs. The Bank also asked the government to set up a road appellate tribunal and mainstream pre-construction and post construction clearances in order to help India build a better roads network.

Releasing the study,minister for road transport and highways Kamal Nath said that the government was working on a mechanism to reduce the project preparation period from the current 18 months to about 8 months,streamlining various processes and approvals.

Highlighting the fact that contractors can hold projects to ransom,the Bank suggested that the government should initiate a system of

Story continues below this ad

rating and grading construction companies involved in road infrastructure development.

Despite the problems,the Bank is considering to step up its assistance in various states. It is also considering a loan of $3 billion for development of national highways in the country.

In the states,the Bank has been doing projects in the range of $300-400 million or so and is now considering an enhancement up to $500 per project for the construction of state highways in Gujarat,Punjab,Haryana and Karnataka. The Bank also wants to replicate the success formula of these states especially Gujarat in other states so as to expedite the speed of development of state highways.

We are considering increasing support to projects in these states,as they have gathered critical mass enhancing technical capabilities and improving process implementation, Ben LJ Eijbergen,lead transport specialist and country sector co-ordinator,World Bank said in Delhi today. Assistance to other states such as Uttar Pradesh,Orissa and Tamil Nadu will depend upon their efforts towards capacity building and enhancing technical expertise,he added.

Story continues below this ad

Talking about delay in road projects funded by the Bank,Eijbergen said that World Bank was in constant touch with the government and making periodic reviews of the projects running behind schedule. In the case of Lucknow-Mujjafarpur highway we are restructuring the project as the progress has been rather slow, he said. Last year,the bank had written to the department of economic affairs raising concerns over the slackening pace of work at the project considering temporary suspension of finance.

We have developed a system by way of which we handle such projects. First we review projects,then suggest measures for fixing the problems and then restructure the project, he said. Restructuring could also include going in for re-bidding and holding back funds,if the contractor does not perform.

Tags:
World Bank

‘Grave insult to wounded people’: Cong lashes out at PM Modi amid his first Manipur visit

India4 hr ago

As Prime Minister Narendra Modi visits Manipur for the first time since ethnic violence hit the state in May 2023, the Congress on Saturday called it a “farce, tokenism, and a grave insult to a wounded people”.

View all shorts

Live Blog