Troubled by the decision of two leading developers to walk out of two large road contracts, key ministries led by the Prime Minister's Office have initiated a damage control exercise to ensure that other private developers do not follow suit, leaving behind a raft of halfbuilt highway projects.
National Highways Authority of India (NHAI), in the last two weeks, has seen a concerted attempt to informally reach out to these highway builders to ascertain the extent of the problems they face. M Murali, Director General of National Highway Builders' Federation has been asked to submit a laundry list of developers' problems with proposals for remedial steps, which the Federation should be sending within a week.
He added that the PMO, Finance Ministry and the Road Transport and Highways Ministry were concerned about the crises enveloping the sector, one of the rare successes in India's infrastructure story. Some 21,000 km of road projects were awarded in the last three years, but earlier this month GMR and GVK walked out of previously awarded projects citing delays in getting environmental clearances.
GMR was the first, walking out of the Rs 7,200 crore Kishangarh-Udaipur-Ahmedabad road project for which it had bid to pay NHAI an annual premium of Rs 636 crore. A fortnight later, GVK Infrastructure turned its back on the Rs 3,200 crore Shivpuri-Dewas project it had won in January 2012.