The global Covid-19 pandemic has affected every sector of the economy and way of living as a whole. The pandemic continuing since early 2020 has also affected the pace of development in India.
The union government informed Lok Sabha that construction works on National Highways got delayed due to the Covid-19 pandemic, and the loss of time was estimated to be generally in the range of three to nine months depending upon the project parameters.
The Ministry of Road Transport and Highways said that to expedite the construction work and to achieve the targets; the Government has taken several steps like granting time extensions for three to nine months, relaxation in contract provisions for ensuring cash flow, direct payment to sub-contractors and release of retention/security money to augment cash flow and waiver of penalty in case of delay in submission of Performance Security (for new contracts).
The delay in projects sometimes leads to cost escalation. In Build Operate Transfer (BOT) projects, escalation cost is absorbed by the concessionaire.
In other projects, price escalation is payable as per contract conditions. The actual amount of price escalation and inter-alia the actual increase in project cost is known only on completion of the project and final settlement of bills.
“The Government is regularly carrying out reviews of National Highway works, at different levels, in various states. Detailed reviews have been held in the recent past with project implementing agencies, project developers, concessionaires, state governments and other central ministries. These reviews led to resolution of many project related issues concerning land acquisition, forest clearance, utility shifting, contractor performance, etc. inter-alia leading to better progress in construction,” the Ministry of Road Transport and Highways said.