To avoid conflict with developers, NHAI may alter contract wording

The National Highways Authority of India (NHAI) is understood to be considering a change in wording of future contracts to avoid conflicts with road developers, such as the ongoing cases in which it has barred companies from bidding for future projects. NHAI’s executive committee held a meeting with the National Highway Builders Federation (NHBF) on Thursday during which NHAI agreed to consider NHBF’s suggestion to reconsider replacing the word “termination” with “cessation” or other similar words or phrases. In the ongoing case of developers who have been listed as defaulters and barred from bidding for future projects, the issue arose because developers had to invoke the termination clause, thereby getting themselves blacklisted by NHAI. PC Grover, director-general, NHBF, told FE that the NHBF has already presented NHAI with concession agreements of metro projects and model concession agreements of projects with agencies such as World Bank and the Japanese International Cooperation Agency (JICA).

“NHAI has now asked us for specific points which we will study and present to them in a few days. Different words and phrases can be used to better cover eventualities other than to call it a termination of contract and take things to their extremities,” Grover said. Companies which are on the debarred list include L&T, HCC and Essel Infraprojects, among others. With respect to these ongoing cases, NHAI has asked the road builders to procure an order stating why they should not be debarred from future projects.

The HCC toll project concerned, namely Raiganj Dalkhola Highways, has been delayed for six years due to land acquisition delays. The alleged termination is undergoing an adjudication or conciliation process. L&T IDPL, a subsidiary of L&T, also “terminated” a concession for the Pimpalgaon Nashik Gonde project due to force majeure events arising from law and order issues, as per provisions of the concession agreement, after completing the project. L&T had said earlier that the termination cannot be treated as a concessionaire event of default. This case, too, is sub-judice as it is under arbitration/conciliation.

National Highways Authority of India