Media reports indicate that the union cabinet may consider the proposal of the road ministry to allow road developers to sell their 100 percent stake in already awarded projects in favour of more capable firms.
The highway ministry proposed this idea as many highway developers are unable to begin work on their project because of financial and other constraints.
With the finance ministry opposing this proposal, the road ministry wants the union cabinet to consider this.
The department of expenditure suggested rebidding of about three dozen already awarded projects instead of allowing a new player to be given responsibility since these were bid out under certain conditions.
The road ministry, however, claims that there should be no objection to the proposal of replacing a developer where government won’t lose the quoted upfront revenue (premium) and the new player has technical capability and the financial capacity to execute the project.
Further, the highway ministry wants the cabinet to allow private companies specializing in construction to sell their 100 percent equity “three” months after the project becomes operational. This would enable the firms to take up fresh projects.
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