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Ambiguity in the model concession agreement, which is the contract document between developers and the highways authority, may raise the number of disputes and claims against the National Highways Authority of India (NHAI), a white paper by the Road Transport and Highways Ministry has indicated.
The highway sector is already facing disputes involving ₹27,209 crore related to 189 projects. The white paper said the model concession agreement has many provisions that have “differing interpretations”.
“Under law, any ambiguity in contractual provisions is liable to be interpreted against the maker. Hence, there is a high potential for future disputes, protracted litigation and claims against NHAI or Government,” the paper has said.
The paper added that the model concession agreement has not taken into account the ground-level technical and financial nitty-gritty. For instance, in the event of either of the parties not being in a position to satisfy all the conditions, it does not specify whether NHAI has the option to close the contract. It further stated that a contract should also have provided for “amendment on mutually agreed basis”, which is not the case.
Even making amendments in the model concession agreement is “cumbersome”. Any change in the contract can be done after the Ministry refers the issue to an inter-ministerial group (IMG). Even if one member of the IMG disagrees with the change proposed, the matter has to be placed before the Cabinet for a decision.
Open tollingThe paper also points to the problems of open tolling. Except for a few, most of the toll roads have an open tolling system and are not access controlled. Villagers often cut passages through the highway to go to other the side. Slow moving vehicles such as tractor-trolleys disrupt traffic, increasing the chances of accidents.
In Maharashtra and Uttar Pradesh, political parties instigate road users against toll payment creating a law and order issue, says the paper. Though not widespread, this increases the risk profile of road projects.
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