Highway builders seek PM’s intervention on PPP project timelines, arbitration curbs

NEW DELHI: Country’s apex highway builders organisation has sought PM Narendra Modi’s intervention to review the squeezed construction timelines for big highway projects on PPP, their overall bankability and modification in dispute redressal through arbitration.

The National Highways Builders Federation (NHBF), in a letter addressed to the PM, has referred to a recently floated tender for a 200-km greenfield project on Public Private Partnership (PPP) in which a two-year construction period has been set.

“Considering the scale of such projects and the scope of activities involving land availability, utility shifting, major and minor structures, interchanges, safety provisions and stringent quality standards, the industry apprehends that such timelines may pose significant execution challenges, even best efforts,” NHBF said.

It has cited how the Delhi-Vadodara Greenfield Expressway, despite focused attention and continuous efforts by stakeholders, is yet to be completed even after more than five years from commencement. It has urged govt to set realistic construction timelines to ensure quality and timely completion.

It has also raised its concern over the recent amendments to dispute resolution provisions of PPP agreements, wherein arbitration for disputes above Rs 10 crore has been restricted. The changes have been made with reference to the finance ministry’s June 2024 circular.

NHBF has said that while arbitration has been curtailed, “well-advised and financially strong participants may still bid, but disputes — if they arise — are likely to go to courts”. It said in such a scenario, even relatively small contractual issues may result in prolonged litigation, disruption to project execution and escalation of claim values, ultimately leading to higher fiscal exposure for govt, rather than faster or more efficient dispute resolution.

“There is also a concern that such a framework may inadvertently encourage the emergence of entities oriented more towards litigation-driven outcomes than execution, and that even minor disputes could potentially lead to complete stalling of projects, which may not align with the original objectives of the PPP highway programme,” the highway builders body said.

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