Sunday, August 06, 2006
Construction cos call for easier land transfer rules
NEW DELHI: Private construction firms want the government to amend the Model Concession Agreement (MCA) for the road sector, making states responsible for the land acquisition.
Land acquisition is one of the major problems in road construction. Developers alleged that in many instances projects are awarded without 100% land acquisition and they are blamed for any delay in executing the project.
Private firms are shying away from undertaking road sector projects as they feel that they have been burdened by unnecessary responsibilities. “It has been observed the MCA passes on many of the sovereign responsibilities to the private party.
For instance, land acquisition and removal of obstacles were made the responsibility of the private companies. This has not gone down well with the private sector,” CII Infrastructure Council chairman Vinayak Chatterjee said.
MCA makes the developer responsible for procuring any additional land required for the project. Further, it specifies that the private parties would have to bear the cost of removing utilities and trees. Any legal dispute arising due to such actions would also be the responsibility of the private builders.
Private companies stated that their responsibility should be confined to construction of the project under hassle-free environment.
The industry has highlighted three contentious issues in the MCA; land acquisition, right of way and dispute resolution. DS Constructions director ND Mehra said that the MCA is ambiguous which discourages investors. “For any agreement, it is a primary requirement that it should be devoid of any ambiguity. It was expected that under the liberalised regime more flexibility and freedom would be allowed to investors in the infrastructure sector, whereas the MCA does not seem to be in line with this policy.”
Penalties and dispute resolution seem to be biased in favour of the authority. The MCA prescribes very little penalty for the delay caused by authorities.
“The mild nature of punishment is not enough to act as a deterrent for avoiding delays,” Simplex Infrastructure director Amitabh Mundhra said.
Land acquisition is one of the major problems in road construction. Developers alleged that in many instances projects are awarded without 100% land acquisition and they are blamed for any delay in executing the project.
Private firms are shying away from undertaking road sector projects as they feel that they have been burdened by unnecessary responsibilities. “It has been observed the MCA passes on many of the sovereign responsibilities to the private party.
For instance, land acquisition and removal of obstacles were made the responsibility of the private companies. This has not gone down well with the private sector,” CII Infrastructure Council chairman Vinayak Chatterjee said.
MCA makes the developer responsible for procuring any additional land required for the project. Further, it specifies that the private parties would have to bear the cost of removing utilities and trees. Any legal dispute arising due to such actions would also be the responsibility of the private builders.
Private companies stated that their responsibility should be confined to construction of the project under hassle-free environment.
The industry has highlighted three contentious issues in the MCA; land acquisition, right of way and dispute resolution. DS Constructions director ND Mehra said that the MCA is ambiguous which discourages investors. “For any agreement, it is a primary requirement that it should be devoid of any ambiguity. It was expected that under the liberalised regime more flexibility and freedom would be allowed to investors in the infrastructure sector, whereas the MCA does not seem to be in line with this policy.”
Penalties and dispute resolution seem to be biased in favour of the authority. The MCA prescribes very little penalty for the delay caused by authorities.
“The mild nature of punishment is not enough to act as a deterrent for avoiding delays,” Simplex Infrastructure director Amitabh Mundhra said.
# posted by mashup @ 7:57 PM 
