Highways Ministry settles claims worth Rs 14,248 cr to fast track projects

The government on Tuesday said it has settled highways developers' claims worth Rs 14,248 crore this year to fast track projects and boost their confidence in building quality road infrastructure.

Besides, conciliation committees of independent experts have also been formed to settle all issues amicably, it said.

The Ministry of Road Transport and Highways (MoRTH) in a statement said it has undertaken settling of contractors' issues, including dues, through arbitration in a big way to not only ensure ease of doing business but also to boost stakeholder confidence in building quality road infrastructure in the country.

"Conciliation Committees have been formed consisting of Independent Experts (CCIEs) for this purpose. All contractors are being called for conciliations for expeditious settlement of their claims and get their payments released immediately. 47 cases involving claims of Rs 14,248 Crore have been settled during this year. Discussions are underway on another 59 cases," the statement said.

The annual annuity obligations for NHAI (National Highways Authority of India) are approx Rs 5,000 crore, it said, adding all annuities payments are made in time.

In HAM (hybrid annuity mode) projects, NHAI provides 40 per cent of the bid project cost as construction support based on achievement of the milestone.

"Whenever the milestones are achieved, payments are made quickly. The Grant /VGF (voluntary gap funding) towards BOT (Toll) Projects are paid as per the terms of the Concession Agreement and depends on many factors including physical progress, equity and debt infusion," the statement said.

No overdue payments are pending with NHAI, it said, adding various systems have been introduced for immediate payment of dues.

Special efforts were made and over Rs 10,000 crore were disbursed towards various payments in the first nine days of nationwide lockdown, the statement said.

The payment structure has been further simplified under the Atma-nirbhar Bharat (Self-reliant India) scheme, and contractors' payments are being made every month instead of milestone achievement basis, it noted.

The ministry said it has also extended several relief packages for its contractors and concessionaires owing to Covid-19 scenario.

"Retention money (which is a part of the Performance Security till construction period) is being released in proportion to the work already executed in accordance with the Contract specification, and retention money for upto six months' period is not deducted from the Bills raised by the Contractor," it said.

For HAM/BOT contracts, performance guarantee is released on a pro-rata basis.

"Out of total 1,253 applications under 1,155 projects for this relief, Rs 3,527 crore has been released, while over Rs 189 crore is under process," the statement said.

Extension of Time is being given to contractor/concessionaire for meeting their obligation under the contract for up to six months depending on site conditions. Out of total 207 applications under 196 projects for this relief, Rs 34 crore has been released, while Rs 15 crore is under process.

"Relaxation is given... to provide monthly payment to the Contractor for the work done and accepted as per the specification of the contract during the month EPC/HAM Contract. Out of total 863 applications under 774 projects for this relief, Rs 6,526 crore has been released, while over Rs 2,241 crore is under process," the ministry said.