Provided undue benefits to private parties by fixing longer concession period

The National Highway Authority of India (NHAI) burdened users with an extra Rs.28,361 crore while providing undue benefits to private parties by fixing a longer concession period, the Comptroller and Auditor-General (CAG) has said in its audit report on the implementation of the National Highways project.

The CAG said the NHAI failed to fulfil the role assigned to it by the government and provided undue benefits to private parties — including Reliance Infrastructure, L&T and IRB infrastructure among others — to the tune of Rs. 2,928 crore.

The report, titled “Implementation of PPP projects in NHAI,” covered 94 projects under phases II, III, IV and V of the National Highways Development programme (NHDP) constituting 45.41 per cent of the total 207 BOT projects as on March 31, 2012.

Tabled in Parliament on Tuesday, the report notes that in the case of the Delhi-Agra NH project, awarded to Anil Ambani’s Reliance Infra, clause 31.3.1A, relating to withholding of toll collection in case of failure to achieve major milestones, was missing from the concession agreement.

“Toll revenue of Rs.303.62 crore was diverted by concessionaires in the Delhi-Agra and Pune-Satara projects as investments in Reliance mutual funds rather than being spent on construction work,” the report said.

The report said there would be an additional burden of Rs.30,247.60 crore on users due to levy of partial tolls on incomplete projects, non-realization of toll revenue from annuity projects due to delay in completion, and a longer concession period among other reasons.

The CAG also said the NHAI failed to achieve the 20 km a day target for widening and up-gradation of national highways during 2009-10 to 2012-13. “The NHAI’s best achievement was 17.81 km per day during 2011-12 which dropped to a mere 3.06 km per day during 2012 despite availability of sufficient funds,” the report said.

It said the NHAI did not appear to have adopted objective criteria to select highways for improvement and incurred a loss of Rs.856.8 crore due to change of scope in 23 projects.