Developers reluctant to take up new road development projects
New Delhi- Over Rs 15,000 crore of several infrastructure development firms has been locked up in the ongoing highway projects as the concerned officials are not ready to approve excess cost for projects even though the costs are legitimate.
All such additional payments made over extra works and costs, which are permitted during road construction works, has piled up in builders’ accounts. As a result of this, the builders are reluctant to look at new projects. Adding to this problem, banks have stopped considering guarantees extended by the National Highways Authority of India (NHAI) while considering project loans.
As per the contracts, builders are forced to complete projects within the given time. However escalations in cost or variations that arise due to unanticipated reasons are allowed, but the payments are made only after technical surveys. But in many cases, although technical approvals are done, payments are left pending.
Despite of knowing that payments are legitimate, officials hesitate to clear because they fear of being pulled up by Comptroller and Auditor General (CAG).
Last month, in a meeting with construction firms, Road Secretary AK Upadhyay accepted that NHAI officials were trying to play safe due to the fear of being questioned by the auditor. They are particularly scared of clearing payments as most of them are on deputation from other departments.
Payments of over Rs 15,000 crore for routine cost escalations, royalties, deviations and variations in projects are locked up in arbitration and litigation in courts, admitted M Murali, director general of the National Highway Builders Federation.
Locked up bills are resulting in lack of interest in developers to start new development projects. However, the road and finance ministries have been requested to help resolve the issue.
Comptroller and Auditor General, construction firms, Delhi, highway projects, Infrastructure development, infrastructure development firms, National Highway Builders Federation, National Highways Authority of India, New Delhi, NHAI officials, ongoing highway projects, road construction work
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[...] Developers reluctant to take up new road development projects [...]
[...] Developers reluctant to take up new road development projects [...]
[...] Developers reluctant to take up new road development projects [...]
[...] Developers reluctant to take up new road development projects [...]