Economic Times: October, 2015
New Delhi: The government will soon unveil a compensation policy for private players investing in the roads sector, which will seek to compensate companies for any clearance related delays in projects. This will provide builders the comfort to invest in road building that is high on the government's priority list.
"We'll soon unveil a policy so that companies could be compensated for any clearance related delays," Roads, Transport and Highways Minister Nitin Gadkari said on Wednesday. "Officials take 15 days' time to sign on a project worth Rs 2,000 crore. I asked them what the interest cost is and what impact it would have. We should not lose on time," he said.
Gadkari's ministry could consider increasing time period of project or monetary compensation for companies, a top government official told ET. The policy is expected to be finalised in two months.
The step is expected to boost investor confidence in the sector several companies have stayed away from making more investment due to delay in clearance of projects.
The government's target is to bring in private investment worth Rs 75,000 crore in the roads sector during the 12th Plan.
Though the government has ambitious plans to boost investments, projects worth just around Rs 6,000 crore could be awarded in 2014-15.
The previous year, the value of projects awarded under public-private participation was less than Rs 1,000 crore, as stressed companies were unable to bring in funds.
"We have made it mandatory that new projects would be awarded only when 80% of the land is acquired, so that there are no delays on account of land acquisition," Gadkari had told ET earlier.
Gadkari also said that under the Narendra Modi-led government, 283 stalled projects worth Rs 3.8 lakh crore have already been rolled out. "Majority of the projects were stuck on account of forest clearances and regulatory hurdles.
Fast decision making, online clearances, policy intervention and other measures led to the roll out of majority of the projects," he added. "After taking charge, I have signed new contract for more than Rs 1.5 lakh crore," he said. According to officials, only 12 projects are currently stuck in the roads sector and most of them would be rolled put soon.