Emission norm violation a problem with all auto firms: Vijay Chhibber

Vijay Chhibber, secretary of the ministry of road transport and highways, says in a interview that violation of emission norms is not limited to Volkswagen

Amrit Raj, Jyotika Sood
Updated5 Jan 2016, 07:42 PM IST
Vijay Chhibber also said that developers who have not completed their projects in time will not be allowed to participate in future projects. Photo: Pradeep Gaur/Mint<br />
Vijay Chhibber also said that developers who have not completed their projects in time will not be allowed to participate in future projects. Photo: Pradeep Gaur/Mint

New Delhi: Violation of emission norms is not limited to Volkswagen, Vijay Chhibber, secretary of the ministry of road transport and highways, said in an interview on Thursday, the day of his retirement. The absence of a robust inspection regime helps firms get away with high emission levels, he said, adding that Volkswagen is being made a scapegoat. Chhibber also said that developers who have not completed their projects in time will not be allowed to participate in future projects. Edited excerpts:

What’s happening on the Volkswagen front?

Why are we all so fixated with Volkswagen? VW story is the same for all autos. We don’t have a robust in-service inspection in the country. So, if you have found a problem with Volkswagen, I am sure you will find it with all others... We don’t have an in-service regime. You do it for any vehicle, you will find it. We are so much fixated with how much does a new car emit. The real test is on the road. We don’t have that regime established. This is like one part of auto industry trying to kill a major player in the Indian market. I don’t want to get into this commercial boxing match. The fact is that we need to do better in terms of our overall regulatory regime. We are working on that.

Taking forward the conversation we had two days ago, you spoke about vehicle pollution and MSTC Ltd probably getting the nod to set up vehicle crushing units. How is it going to work and how many years of usage is the government is looking at?

Supposing we say 15 years is the life of a commercial vehicle. Today, after 15 years, the owner gets nothing if he sells it to a kabadiwala (scrap dealer). You go to west Delhi, you will find it selling for 6,000 per tonne. But auto-grade metal should get 12,000-13,000 per tonne. A professional agency which knows the value of each part can offer better value. The owner gets back something on his old vehicle. Besides, anybody bringing it to a crushing unit will get a certificate that will entitle him to a tax/excise break. He gets a break of 30,000 (for every tonne of steel). In a way you are incentivizing owners to recycle.

If excise is 40%, give him a break of 15%. At least you are getting excise of 25% on a new vehicle. So it’s a win-win situation. That idea has been conveyed to the finance ministry and we have also had a meeting in this regard.

This would require a lot of money.

No, there is no cash payout to the owner. There is a company which knows the value, it will pay the value of the metal. We are not subsidizing it. The subsidy which is there is in that letter or certificate which entitles you to reduced excise to purchase a new vehicle. If you buy a vehicle you get it cheaper. But if this is not there I continue to use my 15-year-old vehicle for another 15 years. Since I’m not buying any new vehicle, there is no excise floating up. By this methodology you are forcing people to go and buy a new vehicle. Good for the auto sector, good for government revenue.

So what is the excise rebate?

That is up to the finance ministry.

How do you rate this government?

It would be very unprofessional of me to be rating the government. Every government has its own plans. As far as this (road transport and highways) sector is concerned we have been given a very clear mandate. We have got all the support. Whatever policy initiatives we have taken, we have been supported. As far as our wishlist is concerned, we have been supported. Money-wise we have got whatever we asked for. I don’t think we can ask for more. Wherever there were roadblocks, all parts of the government have been very supportive. We have monthly video conferences with the state governments. We have maximum land acquisition issues with the state governments. So things have gained momentum.

Do you think in the past year land acquisition has eased up?

No, it has started to ease. One reason is the proactive intervention at the political level. Another reason I think is land/compensation rates have gone up substantially. People are now quite happily parting with their land.

Would it have been easier if the land bill had been passed with original spirit intact?

For linear projects, amendments were necessary. In fact we had said keep us out of the land policy. Then we said at least get us off the second and third schedules which deal with R&R (rehabilitation and resettlement). First schedule deals with compensation. Our point was that we are not mines that take away or destroy a whole village or a couple of villages. Linear projects don’t destroy an area. Therefore, this whole business of exposing us to R&R doesn’t make sense and we are not going to be there for long. When mining or industry needs to be set up they are going to be there for 30-40 years. But in our case we are making a road and getting off. We don’t have presence there.

How will road construction shape up in 2016?

We haven’t set a target but we were a little unsure when we fixed 10,000 km for this year (2015). That again was a big challenge. It looks like that this year we are bang on target. And if you can do 10,000 km, you can do more. But my advice and suggestion is don’t try to do more but try to do it right. Let’s start focusing more and more on the quality aspect. And its also time to slowly start and bring back PPP (public-private partnerships), not in the same manner as the UPA (United Progressive Alliance) had done. Now construction industry is getting back on its feet and it will take a little more time to put it all together. Rather than going for more length, focus should be on quality of 10,000 km.

Of the 10,000 km, how much do you think will come under PPP model?

Broadly if you do 30% in PPP, that would get you the momentum and quality. We should not get fixated about going beyond 10,000 km. The system has a certain capacity... rather than diluting that capacity let’s do it right. Year after year after year, 10,000 km.

What are the changes required to get the private sector momentum back?

Basically banks have to tighten up. They should be wary about the projects they get into. The Kelkar committee has given a few pointers. We have a case where lead banks agree but the other 11 banks have not agreed. The other banks later say they agree but they have to go to the board for permission and a board meeting is going to happen in the next three months. So that is why he said the consortium should not have 12 banks. Do it with 2-3 banks so that everyone can talk to each other and get on. It requires decision making and timely decision making.

When we take the BOT (build-operate-transfer) route we try to make projects financially viable. If they don’t work financially, put them on EPC (engineering, procurement, construction) model. Don’t get fixated with mode of delivery. Get fixated with all the features of roads. Don’t degrade the quality aspect for financial aspect. Because eventually you have to add up those.

What happens to developers who have not completed their projects? Will they be allowed to bid for the next round of construction?

No, I think not. That circular is being drafted. We are still working on terms and conditions. But in principle we have to find a way to stop them from re-bidding.

That would mean a lot of developers would be out of business.

That’s the only solution. We don’t have a framework ready so we don’t have the numbers ready. But its good to get these people out of the way so that they start focusing on their past commitments rather than having new ones.

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First Published:5 Jan 2016, 07:42 PM IST
HomeIndustryManufacturingEmission norm violation a problem with all auto firms: Vijay Chhibber

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