Infrastructure panel eases contract award norm for NHAI

The Committee on Infrastructure has finally given a go-ahead to relax the stringent guidelines related to land acquisition for national highway projects.

The Committee on Infrastructure CoI has finally given a go-ahead to relax the stringent guidelines related to land acquisition for national highway projects.

As against 80 per cent land that needs to be acquired by National Highways Authority of India NHAI for award of contract under the model concession agreement MCA, the CoI has agreed to bring this down to 50 per cent.

At a meeting of the CoI chaired by Prime Minister Manmohan Singh earlier this month, sources said the committee had given the go-ahead for this amendment in the MCA with the caveat that the relaxation would be reviewed after a period of two years.

What this means is that the NHAI now has the flexibility to process highway projects and get required approvals from the inter-ministerial public private partnership appraisal committee PPPAC for even those projects where only half the land needed to be acquired has been actually acquired. Sources said as per the PPPAC approval process, adhering to the MCA is a necessary condition for giving project approvals.

Ever since the MCA was cleared by the CoI in 2005, the Road Transport Ministry has voiced its concern on some of the stringent provisions in the MCA that not only requires 80 per cent land to be acquired for award of highway contracts but also imposes stiff penalties on the NHAI if they failed to do so in a specified time period.

Given the NHAI8217;s track record on land acquisition for the golden quadrilateral programme and the north south-east west corridor, there were fears that such provisions in the MCA would lead to a situation where other programmes such as NHDP III, IV, V and VI would get stalled with only those stretches where land has been acquired being executed.

While the MCA is crucial for programmes starting from NHDP III, which are being executed on a build-own-transfer basis, it is interesting to note that as on January 1, 2007, the NHAI was able to acquire only 39 per cent of the total land needed to begin construction work for the north south-east west corridor that falls under NHDP II.