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Highway builders seek Rupees 20,000 crore from NHAI

Developers to incur additional expenditure on account of change in project mid way

Mumbai: Highway developers have filed for claims amounting to over Rs 20,000 crore to road projects before various courts and arbitration tribunals across the country.

According to the National Highway Builders Federation (NHBF), these claims relate to additional cost incurred by the highway builders on account of delay in land acquisitions, shifting of utilities, cost escalation due to delay in the completion of projects and additional expenses owing to change in the scope of the projects.

M. Murali, director general of NHBF said that highway developers have to incur additional expenditure on account of change in the scope of the project mid way.

“This would be in form of diversion of project sites or else due to the construction of some additional subways or over bridges, which were not part of the original plan outlay,” he said.

According to him, there is also considerable amount of delay in project completion dates and commercial operation dates, which could sometimes even go beyond six months.

“During this time, the developers are required to service their loans though they are not earning any toll revenues from those completed projects,” he said and added that there are over 1,000 such disputes pending before various courts and tribunals across the country.

Some of the projects have also run into trouble on account of faulty traffic projection and wrong estimation of the project cost.

Uttar Pradesh tops the chart with the highest amount of pending dispute amounting to Rs 3,855.56 crore followed by Andhra Pradesh and Karnataka with pending disputes worth Rs 2,225.06 crore and Rs 2,055.34 crore respectively.

Since the present system of arbitrsation proceedings was taking a considerable amount of time and money, NHAI and NHBF have floated a new arbitration body called Society for Affordable Redressal of Disputes (SAROD) for ensuring time bound disposal of disputes at an affordable cost.

“In some of the instances the cost of arbitration itself accounts for almost 60-70 per cent of the disputed amount while in some cases the cost of arbitration even exceeded the amount of disputes. We hope that most of the future disputes would now come before the newly formed arbitration body,” said Mr Murali.

( Source : dc correspondent )
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