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Construction : Web Exclusive | April 2013 | Source : Construction Update

NHAI to go for out-of-court settlements

Out-of-court settlement of disputes is being pursued by the National Highways Authority of India (NHAI) to fast-track highway construction. Developers have made claims of Rs 10,000 crore in several build-operate-transfer projects. Many of these cases have gone to arbitration, locking up funds for developers already squeezed by a drought of bank finance, delayed clearances and overall economic gloom.

The move is likely to benefit construction majors like L&T, IVRCL, GMR, Punj Lloyd, Nagarjuna and HCC. The NHAI feels that settling these cases could lead to the release of at least some of the disputed amount to the concessionaires, helping them bid for new projects and make investments. Usually, it takes years to get disputes and claims to get settled through arbitration.

Both NHAI and the concessionaires have come around to the view that early settlements would benefit both, an NHAI official said. A committee headed by NHAI’s Chief General Manager (Technical) is studying the possibility of amicable settlements and has made efforts in this direction in the last one month, the official added.

Once the committee settles a case, it will be referred to an independent settlement advisory committee, comprising former roads secretary AK Upadhyay, retired chief justice of Delhi High Court Rekha Sharma and ex-director general (Road Development) AV Sinha. This committee will approve claims after assessing all aspects, before disbursing the claim amounts to concessionaires.

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