The process to free up about Rs 11,000 crore of funds stuck in disputes between National Highways Authority of India (NHAI) and contractors could begin soon.

The Highways Ministry will set up a committee headed by a retired High Court Judge to implement the dispute resolution mechanism as decided by the B.K. Chaturvedi committee.

Many national highway developers, including Larsen & Toubro, Gammon, IRB, Afcons, HCC and Madhucon, have ongoing disputes with NHAI involving the contracts implemented.

A total of 1,635 cases are pending in arbitration tribunals and courts — they involve a total amount of about Rs 11,000 crore.

There are 536 disputes pending in courts and 1,099 in arbitration tribunals relating to highways development projects. The amount involved in each dispute ranges from less than Rs 1 crore to Rs 69 crore before the courts; and from less than Rs 1 crore to Rs 1,514.32 crore in various arbitration tribunals.

“An empowered Group of Ministers (eGoM) has already given the go-ahead. Now, a committee has to be set up headed by a retired High Court judge. The committee will preside over the implementation of decisions taken by the B.K. Chaturvedi committee…The new Secretary (Mr A.K. Upadhyay) has just joined…A decision will be taken soon,” the Highways and Road Transport Minister, Mr C.P. Joshi, said recently. He did not give a specific timeline though.

In 2010, the committee headed by the Planning Commission Member Mr B.K. Chaturvedi had recommended that the matters should be settled on a case-to-case basis by an independent expert group.

Further, for disputes where the amount claimed by contract is less than Rs 10 crore or 5 per cent of contract price (whichever is lower), the committee has suggested that NHAI may offer a “one-time settlement of pending disputes”.

For cases, where the amount involved is between Rs 10 crore and Rs 100 crore, the committee stated, “In general, award of Arbitral Tribunal may be accepted, particularly in cases where the unanimous decision at dispute resolution board (DRB) level is upheld by the Tribunal.”

And for cases where the amount involved is beyond Rs 100 crore, the committee recommended, “Considering the substantial amount involved, NHAI may carefully consider the award of Tribunal before challenging in the court. NHAI may take up with the Arbitral Tribunal/Court for early hearing and disposal of all pending cases. These measures would enable significant savings in interest payment.”

Interestingly, after these recommendations, the NHAI witnessed a trend of firms working out mechanism to fit into a lower category of claims in order to get early settlements.

> mamuni@thehindu.co.in

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