Relief measures for road contractors on the cards

Union minister for road transport and highways (MoRT&H) Nitin Gadkari is expected to hold a meeting with his officials and the National Highways Authority of India to discuss relief measures for highway contractors affected by the second wave of Covid-19, a senior official told ET.

The industry has reached out the government for fresh relief measures or continuation of ones announced last year.

“We have been receiving representation from concessionaires for relief,” the official said. “Some relief will have to be provided. We shall see if measures announced last year can be extended, or we come up with a fresh response,” the official added, asking not to be identified.

Unlike last year, when the first wave of Covid-19 hit, India has avoided a nationwide lockdown this year, though the second wave has been more deadly.

Several states and union territories have announced lockdowns since April this year to curb the spread of Covid-19. While construction work wasn’t restricted in most places, migration of labour back to home states and on-site infections have slowed down highway construction activity in the past month.


In a representation sent to the highways ministry last week, the National Highways Builders Federation said the second wave of Covid-19 has severely affected and continues to affect the progress of works, and consequently, EPC contractors, concessionaires have been affected financially, but are simultaneously providing adequate facilities to the labourers, staff and bearing all the expenses including their Covid treatment, among other facilities.

“MoRT&H is requested to extend various relief measures, as granted earlier under Atmanirbhar Bharat Scheme by MoRTH / NHAI,” it said.

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In June last year, the ministry, as part of the Atmanirbhar Bharat initiative, rolled out a number of relief measures for highway concessionaires, which included payments for the amount of work done, monthly payments to ensure availability of working capital, and payments to subcontractors to ensure adequate liquidity to small players.

The industry body has asked for a decision to release retention money in proportion to the works executed in accordance with the contract specifications to be extended till March 2022.

For HAM (Hybrid Annuity Model) projects, where performance guarantee was reduced to 3% from 5% of bid project cost, it should be extended till March 2022 again, and that a three to six months extension of time be given to concessionaires for achievement of financial closure.

The relaxation of monthly payment to the contractor concessionaire for the work done, which is effective till June 30th this year, should be extended till 31st March next year, it said.

Payments to subcontractors through an escrow account, which was effective till December last year, should be extended till the end of the current fiscal, it said.

These, among other suggested measures, will help remove the constraints of concessionaires, and the execution of balance works and commencement of new works can be achieved in a seamless and smooth manner without getting further saddled with any financial burden, the representation said.



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