The Ministry of Road Transport and Highways (MoRTH) has released a sum of Rs 103.39 billion during the COVID-19 period under the simplified payment process as envisaged in the ambitious Aatmanirbhar Bharat scheme. Another sum of Rs 24.75 crore is being processed and is likely to be released soon.
In the aftermath of the coronavirus induced nationwide lockdown, the Central Government has initiated several steps to ensure ease of doing business and boost stakeholder confidence in building quality road infrastructure in the country. MoRTH has simplified the payment process under the Aatmanirbhar Bharat scheme, and contractors’ payments are being made every month instead of the milestone achievement basis. This has proved extremely beneficial towards timely completion of national highway projects.
MoRTH has extended a number of relief packages for its contractors and concessionaires owing to the COVID-19 scenario. Retention money, which is a part of the Performance Security during the construction period, is being released in proportion to the work already executed in accordance with the contract specifications and retention money for up to six months’ period is not deducted from the bills raised by the contractor. For the hybrid annuity model (HAM) and build-operate-transfer (BOT) contracts, performance guarantee is released on a pro-rata basis. Out of total 1,253 applications under 1,155 projects for this relief, Rs 35.27 billion has been released while over Rs 1.89 billion is under process.
Relaxation is given in Schedule-H to provide monthly payment to the contractor for the work done and accepted as per the specification of the contract during the month engineering, procurement and construction (EPC) and HAM contracts. Out of total 863 applications under 774 projects for this relief, Rs 65.26 billion has been released, while over Rs 22.41 billion is under process.
Direct payment is made to approved sub-contractor through escrow Account. Out of the total 21 applications under 19 projects for this relief, Rs 2.41 billion has been released while over Rs 270 million is under process.
Other Relief Measures
Extension of time is being given to contractors and concessionaires for meeting their obligation under the contract for up to six months depending on site conditions. Out of total 207 applications under 196 projects for this relief, Rs 340 million has been released, while Rs 150 million is under process.
Penalty is waived for delay in submission of performance security and bank guarantee in new contract entered into during March to September 2020. Out of the total 17 applications under equal number of projects for this relief, Rs 90 million has been released.
Extension of time is allowed to consultants, i.e., IE/AE for three to six months depending on site condition. During this force majeure event, they may be considered to be on duty. Out of the total 31 applications under equal number of projects for this relief, Rs 20 million has been released while Rs 10 million is under process.
For build-operate-transfer (BOT) and toll-operate-transfer (TOT) concessionaires, the concession period of contracts is being extended by a period equal in length to the duration of three to six months. Further, for loss in collection of user fee, the concession period is extended by a period in accordance with the contract till the time daily collection is below 90 per cent of the average daily fee. An application for this relief of Rs 20 million is under process.
For all national highway tolling contracts, loss in collection of fee or remittances is compensated in accordance with the contract. An application for this relief is under consideration with MoRTH.
MoRTH has also undertaken settling of contractors’ issues, including dues, through arbitration. Conciliation committees have been formed consisting of independent experts for this purpose. All contractors are being called for conciliations for expeditious settlement of their claims and get their payments released immediately. So far, 47 cases involving claims of Rs 142.48 billion have been settled during this year, with another 59 cases under deliberation.