The National Highways Authority of India (NHAI) is considering providing compensation to road project contractors in case of delays in obtaining statutory clearances and land acquisition.

In a meeting between the Prime Minister’s Office, the Ministry of Road Transport and Highways, and the NHAI, various issues such as compensation to concessionaires for delays in getting environment clearances were discussed.

Although the nature of the compensation has not been divulged, it has been revealed that any compensation would pay for all road projects in general, rather than a particular project.

In 2012-13, the government awarded compensation to just 1,500km of road projects, while the set target for the year was 9,600km, which was later revised to 8,800km.

Road project developers were affected due to the unavailability of financing options, which led to a small number of projects ending due to delays in financial closures.

" It has been revealed that any compensation would pay for all road projects in general, rather than a particular project."

In January 2013, India-based GMR Infrastructure terminated its concession deal with NHAI to build a 555km highway project linking Rajasthan and Gujarat, citing delays in receiving various statutory clearances.

During the same month, GVK Power and Infrastructure also announced that its subsidiary, GVK Shivpuri Dewas Expressway, ended its concession agreement for the construction of a major highway in the state of Madhya Pradesh, quoting similar reasons.

The government is also deliberating on allowing early exits to project developers, while NHAI is currently in the process of formulating an exit policy that will allow concessionaires to make early exits.

In addition to talks on compensation, the Planning Commission has suggested the establishment of an independent road sector regulatory authority for decisions on tariffs and ensuring quality of service.