Planning Commission shoots down the promised proposal of a road regulator
Delhi: Despite the promise made by P Chidambaram the country’s Finance Minister during the budget of 2013-14, Planning Commission deputy chairman Montek Singh Ahluwalia declared that there is no case for a road regulator.
The deputy chairman of the planning commission made the comments within his reply to a proposal which was sent by the Ministry of Road Transport and Highways to set up a regulator. In accordance with the deputy chairman, even though the investments are dragging within the sector, the drag cannot be corrected by the establishment of a regulator. Furthermore, Montek Singh Ahluwalia supplied that the chief reason for the non performance of the system’s operations is due to people having bid very aggressively.
More over, clearances are being delayed and the economy has been facing headwinds, and none of these issues would be solved by a roads regulator. According to the deputy chairman, the reason behind the finance minister’s announcement of the move pertaining to the establishment of a regulator for the road sector was that the road construction segment has been facing unusual challenges which includes enhanced construction risks, financial stress and contract management issues which could have been best addressed by an important and independent authority.
Accordingly, a task force for suggesting the contours of a regulatory mechanism was constituted by the government. The commission has also argued on the point that the companies cannot be allowed by the regulator to exit road projects as it could easily be criticized for conferring potentially undue financial benediction to select bidders.
The planning panel has also decided that the regulator would not be permitted to set the tariffs including that of toll rates since the the government prescribes it and that it cannot be delegated.
The planning panel has also argued against permitting the regulator to re-visit the already existing concession agreements citing that the watchdog can play absolutely no role in re-negotiating contracts as legally it can be done only between the two parties – the government and the concessionaire.
