The government has finally cut the red tape that kept the roads sector tied down by letting the Ministry of Road Transport and Highways under Kamal Nath decide on bidding procedures and make changes to bid documents, effectively keeping the Planning Commission out of the entire process.

The private sector virtually lost interest in road projects over the last two years after the Plan panel, advised by Gajendra Haldea, introduced a string of tricky clauses in the bid documents.

The Cabinet Committee on Infrastructure recently approved the report of a Prime Minister-appointed committee chaired by Planning Commission Member B K Chaturvedi that recommended that the Roads Ministry be given a free hand in making changes to the request for qualification (RFQ) and request for proposal (RFP), the basic bidding documents to be submitted by interested players. At present, the Cabinet’s approval is required leading to inter-ministerial wrangles.

The Chaturvedi report also said companies with cross-shareholding of up to 25 per cent should be allowed to bid for projects. Hitherto, the government restricted such conflict of interest to just 5 per cent. The ministry is also actively pushing for resolving the second part of the conflict of interest clause that prevents companies from bidding for projects if they are associates. With no clear definition of what constitutes an associate, this, too, led companies that did not win a project go to court. This matter has now been referred to the Law Ministry.

“The Cabinet has accepted the recommendation of the B K Chaturvedi committee report. We we will notify it in the coming two weeks,” Nath said today at the Economic Editors’ Conference in Delhi.

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