FE Editorial: Hit the road

Fri, Nov 6 02:39 AM

Minister Kamal Nath is a go-getter. He has been putting much-needed energies into the road transport and highways sector, which fell into an unforgivable rut over the past few years. At a recent interaction—the Idea Exchange—with The Express Group journalists, he said he would build more roads in a year than were built over five years of the NDA's tenure. There's, of course, UPA-I's abysmal record on roads. But what lends credence to his promise of constructing 7,000 km per year across all states, or 20 km a day, is the constancy with which he has been pursuing the target, across various mechanisms. It's not just the roadshows he has been holding in major capitals to encourage foreign investment for India's road projects; he enjoys great credibility today also because of how he has been trying to get domestic processes streamlined. The latest victory in this chapter involves the government's resolution to let the road transport & highways ministry decide on bidding procedures and make changes to bid documents. This effectively sidelines a dated Planning Commission regime that had introduced a string of tricky clauses in the bid documents, making the clearing of both requests for qualification and requests for proposal long-drawn, inefficient processes. According to the ministry, 27 projects involving about Rs 30,000 crore in investment are currently on hold, on account of obscure bid procedures. Nath can now clear these on an expedited basis, which will not only get the concerned road projects off the ground, but also help improve the general investment climate for the crucial infrastructure sector.

A crucial constriction has been the conflict of interest clause, with restrictive termination clauses, exit clauses, forfeiture of bid security clauses and so on also playing spoilsport in the game of getting investors interested. The global economic downturn obviously took an additional toll on investor interest. At the same time, we are told that India still remains a favourite investment destination. If we are to make the best of this guarded investor interest, it makes sense to give the minister enough room to try out the new process. As we have argued earlier, government concerns about bunching of projects in a few hands and any consequent time overruns could be better addressed through a properly balanced incentive structure that would reward timely completion of projects, penalise the laggards, plus perform a quick appraisal of the strength and capabilities of individual players based on past record. Nath has done well so far. But the clock has begun to really tick for him now.

Inside News

Editor's picks