NHAI pulled up for delays in PPP highway projects

NHAI pulled up for delays in PPP highway projects

New Delhi: Majority of the 17 road works awarded under the public private partnership (PPP) as part of Phase-I of National Highways Development Programme (NHDP) were delayed, according to a recent report by Comptroller and Auditor General of India on roads states.

Of the 17 projects, only five were completed in time, while there were delays of two-42 months in others, the report said.

The government would also lose revenue to the tune of about Rs384 crore from the projects under NHDP due to the irregularities on the part of the National Highways Authority of India (NHAI), according to the report.

NHAI did not prepare a detailed project report or levy penalties upon concessionaire for eight of the roads and highway projects under PPP programme.

“If the Authority had fixed the concession period on the basis of sound financial evaluation, the concession period in Jaipur-Kishangarh and Delhi-Gurgaon projects could have been restricted to 12 and 14 years, respectively," the report pointed out.

Consequently, based on the projected traffic collection and reasonable concession period, the concessionaires would gain Rs121.63 crore and Rs187.77 crore, respectively, during the extended concession period.

NHAI also failed to impose penalty of Rs28.23 crore for non-performance of three out of the eight projects.

The report, which studied four projects constructed under the build-operate-transfer (BOT)-toll and an equal number of projects executed under BOT-annuity basis, has been tabled in Parliament.

Toll collection started late in all the four projects reviewed under the BOT-annuity basis resulting in revenue loss of Rs23.89 crore.

Under the BOT-toll system, the contractor recovers the investment through toll collection, while in BOT-annuity projects, the developer takes payments in instalments from the government.

The report adds NHAI did not align base toll rates with the latest wholesale price index at the time of sending draft toll notification to the government. “This resulted in lower toll rates and a consequent loss of revenue of Rs22.73 crore in three BOT-annuity projects," the report adds.

NHAI failed to use escrow account statements in three of the BOT-toll projects and conduct independent audit for the projects, the report states.

The report studied eight of the 17 PPP projects covering a total of 930 km completed under Phase-I of NHDP. These include the stretches of Jaipur-Kishangarh, Delhi-Gurgaon, Satara-Kagal, Nellore-Tada, Tambaram-Tindivanam, Tuni-Ankapalli, Panagarh-Palsit and Palsit-Dankuni.