Budget promised road regulator,Montek says no

“I am not persuaded that there is a case for a roads regulator as I am not sure that it will solve the problem. The principle reason why the system is not working is that people have bid aggressively,” he has said.

Ahluwalia said the economy was facing headwinds and clearances were being delayed. “None of these issues can be solved by a roads regulator,” he said.

Chidambaram had announced the move to set up a regulator for the road sector saying it will be important “as the road construction sector is facing unusual challenges including financial stress,enhanced construction risks and contract management issues that are best addressed by an independent authority.”

Accordingly,the government constituted a task force for suggesting the contours of a regulatory mechanism.

The commission has also argued that the regulator cannot allow companies to exit road projects as it would be criticised for giving potential undue financial benefits to select bidders. It has also said the regulator will not be allowed to set tariffs including toll rates since those are prescribed by the government and cannot be “delegated”.

The plan panel has also argued against allowing the regulator to re-visit the existing concession agreements saying the watchdog can have no role in re-negotiating contracts as it can be only done between the two parties?the government and the concessionaire.