The Union Road Transport and Highways Ministry wants norms to be eased to facilitate midway transfer of contracts by one developer to another as a high number of road projects being stuck for want of equity.
Road Transport and Highways Minister CP Joshi said that the government was facing problems. Concessionaires are having the problems of equity. To have equity, the Ministry is seeking some relaxation from the Ministry of Finance so that the contracts could be transferred to other concessionaires even before two years.
The present guidelines do not allow any developer to transfer the contract to another in the first two years.
The demand comes in the wake of majority contracts awarded last year remaining stuck for want of equity. On the other hand, bidders including big infrastructure players such as GVK and GMR have even walked out of projects midway. Joshi also said the Ministry would ensure that eligibility criteria is not compromised if the midway transfer is allowed.
If there are 20 eligible bidders and the bid winner want to transfer the project midway to any of the other 19 qualified bidders, then it should be allowed, the Minister said. After success of bid if somebody wants to give this to the other concessionaire, it should be allowed so that equity is not an issue. Last year, a number of concessionaires had participated in the bids. They are entitled to execute it, but they are in problem of equity, The Minister said.
Contracts for more than 7,000 km were awarded in 2011-12 when bidders had aggressively bid for the same and has resulted in premium worth over Rs 3,000 crore to the government.