Highway Builders Appeal to PM Modi Over PPP Project Concerns
The National Highways Builders Federation (NHBF), the country's apex organization representing highway construction companies, has formally sought the intervention of Prime Minister Narendra Modi to address critical issues affecting major highway projects developed under the Public Private Partnership (PPP) model. In a detailed letter addressed directly to the Prime Minister, the federation has highlighted two primary areas of concern: unrealistically compressed construction timelines and recent restrictive amendments to dispute resolution mechanisms.
Unrealistic Construction Deadlines Threaten Project Quality
The NHBF's appeal references a specific, recently floated tender for a substantial 200-kilometer greenfield highway project on a PPP basis. The tender document stipulates a construction period of merely two years. The federation argues that this timeline is fundamentally impractical given the immense scale and complexity of such infrastructure undertakings.
"Considering the scale of such projects and the extensive scope of activities—which includes land acquisition, utility shifting, constructing major and minor structures, building interchanges, implementing safety provisions, and adhering to stringent quality standards—the industry fears that such aggressive deadlines pose significant execution challenges, even with the best efforts," the NHBF stated in its communication.
To underscore its point, the body cited the ongoing example of the Delhi-Vadodara Greenfield Expressway. Despite concentrated attention and continuous efforts from all stakeholders, this project remains incomplete more than five years after its commencement. The NHBF has urgently requested the government to establish more realistic and achievable construction schedules to ensure both high-quality outcomes and timely project completion, thereby safeguarding the long-term integrity of national infrastructure.
Arbitration Restrictions Could Lead to Costly Litigation
Beyond construction timelines, the federation has raised serious apprehensions regarding recent amendments to the dispute resolution provisions within PPP agreements. These changes, made in reference to a Finance Ministry circular issued in June 2024, effectively restrict arbitration for disputes involving claims above Rs 10 crore.
The NHBF warns that while this curtailment of arbitration might not deter well-advised and financially robust participants from bidding, it creates a problematic legal environment. "Disputes—if they arise—are now more likely to be pushed into the traditional court system," the letter explains.
This shift, the builders argue, could have severe unintended consequences:
- Even relatively minor contractual disagreements may escalate into prolonged and expensive litigation.
- Project execution could face significant disruptions and delays.
- The value of claims may escalate substantially during lengthy court battles.
- Ultimately, this could lead to higher fiscal exposure for the government, contrary to the goal of efficient dispute resolution.
"There is a genuine concern that this new framework may inadvertently encourage the emergence of entities more oriented towards litigation-driven outcomes than project execution. Furthermore, even minor disputes could potentially lead to the complete stalling of projects, which fundamentally contradicts the original objectives of the PPP highway program," the NHBF cautioned.
By bringing these issues directly to the Prime Minister's attention, the National Highways Builders Federation aims to initiate a constructive review of policies governing India's critical highway infrastructure development, ensuring that the PPP model remains bankable, efficient, and conducive to building world-class roads for the nation.
