Pulled up by the finance ministry for bypassing procedures laid down by the Cabinet for inviting tenders for road projects, the road ministry has now fallen in line.
In August - in a hurry expedite the process of awarding road projects and achieving its target of building 20 km roads per day - the road ministry had issued a order that the National Highway Authority of India (NHAI) could invite/open financial bids for public private partnership (PPP) based highway projects even before they are cleared by the Public Private Partnership Appraisal Committee (PPPAC).
The ministry in anticipation of PPAC approval had invited financial bids for five projects.
This was a clear violation of the guidelines laid down by the Department of Economic Affairs (DEA), ministry of finance, which mandates that all PPP projects with capital cost exceeding R100 crore have to be considered by PPPAC for "in principle" clearance.
Now, following strong objections raised by R Gopalan, secretary, DEA, the road ministry has within a month withdrawn the controversial order. Sources said that in the prevalent atmosphere where the government is under increasing attack by the opposition for failing to check scams, road ministry did not want to rake up another controversy.
Government sources said that the very idea of taking the project to PPPAC was to get it further scrutinised to avoid any loophole. Bypassing the guidelines would have created problems in case of PPPAC failing to clear projects.
"It would have led to legal wrangles and delayed the projects," said a source. In its order issued on September 21, the road ministry has said that NHAI should follow the DEA norms.
In its order issued on September 21, road ministry has said that NHAI can invite financial bids for the project only after obtaining the approval of the PPPAC. Where bids have already been invited, the date should be extended.