News Detail

<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Finance minister P Chidambaram&#39;s budget promise to establish a road regulator during this fiscal may miss the milestone. The Planning Commission has objected to most of provisions in the proposed bill to set up a regulator that would deal with issues like renegotiation of contracts, fixing service standards and their monitoring among other things.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">In his budget speech, Chidambaram had said financial stress, enhanced construction risk and contract management issues could be addressed by a regulatory authority. After wider consultations with stakeholders, the road transport and highways ministry had circulated a cabinet note detailing the provisions.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">But the plan panel observed that the regulator has no role to play in almost all the crucial issues. Objecting to the proposed adjudicatory power of the regulator, the panel suggested that it would be &quot;appropriate&quot; to set up a tribunal for dispute resolution.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">On the issue of renegotiation of existing contracts, the panel has held that re-opening of contract agreement is not possible. The commission said it is a well-settled principle that contract should not be renegotiated. &quot;The outcomes of renegotiation have been found frequently in favour of the private sector and against the government. Such outcomes would be looked unfavourably by the CAG, CVC and CBI leading to bigger questions including the desirability of private participation in infrastructure,&quot; it observed.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">On the proposed regulator&#39;s powers on tariff structuring and tolling mechanism, the panel said fee rules provide for uniform toll throughout the country. It said since the toll rates are approved by the Cabinet, the regulator has no role.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">It said the Cabinet had already approved the institutional mechanism for monitoring all PPP road projects.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">A senior road ministry official said that they are waiting for the finance ministry&#39;s response.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>