Draft pact fails to enthuse road firms

The draft model concession agreement for road projects being developed on the "Build, Operate and Transfer" basis has drawn flak from private operators for failing to address the basic problems of land acquisition and clearances.

"Land acquisition and clearances have been the main factors responsible for delay in road projects causing costs to increase," Rumneek Bawa, president of DS Construction, said.

He said the government should acquire land before giving it out on contract. But the model concession agreement suggested that the concessionaire be responsible for shifting of utilities and cutting trees, Bawa said.

The government has suggested that a detailed programme for acquisition of land will be given to private parties before bidding, so that an informed decision can be made.

Bawa, however, said this would not help companies to solve the problem of interminable delay. In addition, if the acquired land was not contiguous then it was not possible to show progress in proportion to land available, he said.

"Moreover, according to the draft, the concessionaire would be required to acquire extra land to compensate for trees cut while building roads," an L&T executive said. At present, the concessionaire can plant trees on the same corridor, which poses no problems.

"The private operator should be responsible only for construction , quality and arranging finance. Other formalities should be taken care of by the government," said infrastructure financing company, Srei's Managing Director, Hemant Kanoria.

Kanoria added that the government should acquire at least 50-60 per cent of the land before giving it out on concession.

He added that another government proposal that was not practical was to have uniform concession periods for all road projects. '

"The concession period should be variable, depending on the structure and risk attached with each project," Kanoria said. Private parties have also opposed the proposal of allowing the NHAI to take over road project before the concession expires, if there was a need for capacity augmentation.

Companies have suggested that the concessionaire should be informed before-hand that a project would be taken over after a certain time period of time. They have added that, if bidding take place then the incumbent concessionaire should be given preference.