Industry has been complaining about policy paralysis, but this is the first time that someone is taking the government to court for policy paralysis. More curious part is that one arm of government is taking another arm of government to court for inaction. It’s the case of National Highways Authority of India (NHAI) dragging environment ministry to court.
Also read: GMR Infra slips as NHAI keen to disallow co from bidding Two contractors walked away from NHAI Public Private Partnership (PPP) contracts because the highway authority failed to arrange for environmental clearances within the specified time. Is it a sea change in decision making that we can expect triggered from this or is it just some clashing egos. To know, if this can be used as an opportunity to set deadlines for all government bodies, there was a panel discussion. The panelist included BK Chaturvedi, Former Cabinet Secretary and now a planning commission member. Ashok Jha, Former Finance Secretary was also present. Below is the edited transcript of their interview to CNBC-TV18 Q: How do we understand this one arm of government taking another arm of government to court? Is this some kind of a personality or intra-party, intra-government clash? Chaturvedi: No, I don’t think it is a personality clash. The basic problem is that there have court decisions in the case of Lafarge by the honorable Supreme Court. It was felt by the NHAI that their discussions with the ministry of environment led them to believe that their way of interpreting was not exactly what the honorable court had meant. Therefore, as far as their linear roads programmes, where construction of roads takes place, they should be able to have a different perspective. They have gone to the court. It is more of a clarification nature, so that they are able to move forward at faster pace. My perspective is that environmental questions are complicated and quite often these problems arise. Q: If it is only a minor clarification then perhaps it could have been done in a less combative fashion, but there could be a lot of collateral damage. Chatterjee: Collateral damage is substantive. One is at the level where it affects the confidence in PPP projects. Second is where I believe there are almost 15 or 20 promoters with delayed projects. They may be thinking along similar directions. So, the collateral damage is huge at both the levels. _PAGEBREAK_ Q: If it is a minor clarification I would assume two government bodies can sit together and perhaps approach the court with a review or something of the sort. NHAI is standing to lose a lot of money and time. The government is going to look a little red in the face if 15 contractors walk away. What is your sense is the government forcing some arms of government to become disciplined in which case it is a good thing? Jha: No, I think I quite agree with Mr. Chaturvedi. NHAI did not have an alternative. It is because in the Lafarge case, the Supreme Court basically said that environment clearance shall be given only after forest clearance is given. Now this maybe okay for projects like dams etc, but in the linear projects like roads, railways, electricity towers this would not satisfactorily. That is why NHAI had to go to court to seek a clarification from the Supreme Court that this would not apply to projects of roads etc. I don’t think I would agree with Vinayak when he says that it has a huge collateral damage. I think that is basically making a huge issue out of this. The problem was that NHAI was not able to get environmental clearances, so it went to the court for that. Q: If you don’t give the clearance in 6 months it will be taken as expand the period of clearance to maybe even one year, but it should be a yes or a no before that. Shouldn’t this be used in that fashion? Chaturvedi: I don’t know that whether we should use this clarification thing in that manner. However, I would agree with Jha that if it comes out, then for all such projects it will be a great clarification. The number of projects on roads and rail transmission lines are facing difficulties because of this first environmental clearance. It should not be given unless the forest clearance is given and since both take time it is causing problem. So, I do feel that this would help it a lot. However, the government has separately taken an initiative to set up this committee under the honorable Prime Minister. That has a mandate to take up issue wherever there have been delays. I am sure that when the committee meets and it frames guidelines for many of these projects, it will help in having a faster environmental clearance. The fact remains that today this is an important issue as the growth process picking up. There are larger numbers of infrastructure investments coming up in roads, rail, and port. It is essential that the environmental clearances are given fast. I agree that one cannot have an inconsistent policy that today yes and tomorrow no. I think whatever policy we have if we give an environmental clearance that is it and we must have a clear cut policy on that. _PAGEBREAK_ Vinayak Chatterjee, CMD, Feedback Infrap: The key message that is repeatedly going from private sector is that agencies and authorities of government which are bidding out projects should not be allowed to bid out projects till they have first secured all sovereign clearances. Get the clearances first then bid out the projects to the private sector. That I think is a clear message going and the recent examples of GMR, GVK and many others are just pointing towards the fact that award of projects have to done with far-far more homework. Q: This is one suggestion that is coming from industry. Can clearances be given before the projects are even bid out? The other objection is that it is not always possible to get all clearances. Sometimes clearances can't be given earlier. So, can some of the clearances be ensured earlier? Jha: I quite agree. This whole idea of getting as many clearances as possible before bidding out a project has been tried out in the case of ultra-mega power projects. This could also be tried in the road sector. There is absolutely no exception to the fact that there should be strict timelines on all clearances. Unless those timelines are observed they will drag on. I hope that this Cabinet Committee on Investment (CCI) which has been recently set up will look into these issues and frame strict timelines for observation. Q: Is the committee adequate, at the state and at the local level we have time lag before permissions are given. What is your suggestion to ensure timely behaviour? Chaturvedi: There are certain laws on which this sort of provision is there. The problem quite often with these laws is that on the eleventh hour they reject it on some ground or the other. Either that it is incomplete or fake or asks for some additional information and tends to delay it. Such provisions quite often may not be very effective. However, I do foresee is that, in case we have committees like the one which has been set up here and at a national level there is a consensus that similar committees are there in the states. There are these strict timelines which these committees will or may prescribe. That will also be honoured in the state and plus there is an adequate staff. The committee which I chaired on coal had recommended that there should be adequate staff in the states for the forest department. So that they are able to handle these projects and take their own sweet time in making their proposals. There is an incentive for them to do it fast otherwise there is no incentive for the states. It is a private sector project. They are not really highly motivated. There is an incentive for them, staff as well as such committees and consensus at both levels. Then coupled with this if we have a provision in law that in case this has not happened in “X” number of months. Then such exceptional cases will come and such persons will be liable for punishment. If these occur in one or two cases that will be a good model to work on.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!