Road builders may have to pay fine to exit road projects

Union Road Minister Oscar Fernandes has said that road developers in the country will not be blamed for delays in regulatory procedure but have to take responsibility for their own faults and may have to pay up to 1 per cent of total project cost as penalty for exiting. If there is any fault on the part of the concessionaire, then there will be a penalty of a maximum of one per cent, of the total project for the developer to exit the project, he said.

The government is also of the view that the developer will not be held responsible if there is any kind of delay in regulatory procedure. If there is delay in land acquisition or environment and forest clearance, the concessionaire will not be held responsible...in that case they will not be penalised, Fernandes said.

The Ministry of Road Transport and Highways is believed to have firmed up this clause after consultation with the Law Ministry. Last month, the government approved the proposal to facilitate harmonious exit of the concessionaire in ongoing and completed National Highway Projects, a move aimed at expediting implementation of road infrastructure in the country.

This was also done to insulate the National Highway Authority (NHAI) from heavy financial claims and unnecessary disputes. The existing concessionaires both in case of completed and on-going projects have been permitted to divest their equity in totality.