<center><b>ASSOCHAM</b><br>
  <b>Summary Record of</b><br>
  
  <b>First Virtual Meeting of National Council on Roads and Highways</b><br>
  <center><b>Held at 4.30 PM on 20th March 2021
  </b>
  </center>
  <p style='text-align:justify;'>
  The First Meeting of the National Council on Roads and Highways of ASSOCHAM was held through
  video conferencing at 4:30 PM on 20th March 2021.
  </p>
  <p style='text-align:justify;'>
  <b>  D.K. Sain,</b> Chairman of the Council welcomed all the participants and felt privileged to chair the
  council at a time when India has embarked on the journey to become a US $ 5 trillion economy. He
  assured his commitment to driving the council and requested all the members for their support and
  valuable suggestions on different aspects of the roads and highways industry. The journey to begin
  from US$ 2.3 trillion economy to achieve US$ 5 trillion economy is a long journey, but it is noticeable
  that 50 per cent of GDP growth will be coming from the infrastructure sector, for which about INR 111
  lakh crore will be spent in next four years and roads will play a major role in this journey.
  </p>
  <p style='text-align:justify;'>
  In his presentation, he mentioned that in the national infrastructure pipeline, road sector is the second
biggest beneficiary after power with INR 20 lakh crore spending plan by FY 2025, which is about INR 5
Lac crore per annum. Roads are the second-largest network globally with 59 lakh km, of which
National Highways account for 2 per cent of the total road network and carry 40 per cent of total
traffic and 65 per cent of commercial traffic. As road traffic is heavily loaded, there is a need to improve
road infrastructure for faster economic growth.
</p>
<p style='text-align:justify;'>
He mentioned, "The sector has a CAPEX budget of INR 1.73 Lakh crore this year of which INR 1.22 Lac
cr will come from NHAI and INR 0.51 lac cr will come from other sources. This is 40 per cent of INR 5
Lac cr, which is centrally driven, another 40 per cent will come from states and the remaining 20 per
cent from the private sector. NHAI will award 8500 kms this year which is double of last year. The road
completion target is of 11000 kms. This year which is about 32Kms per day. The major outlay is for
states like Tamil Nadu, Kerala, West Bengal, and Assam. InVit of INR 5000 crores for 5 operational
roads have been announced and another 12 highways have been planned to be monetised. There is
an emphasis on ATMS implementation and for new 4 & 6 lanes. The Government has announced a
labour portal on construction workers and NHAI is strengthening the dispute resolution mechanism.
Export of iron ore has been stopped and import duty on steel has been reduced, which will bring down
the cost".
</p>
<p style='text-align:justify;'>
Initiatives for Growth drivers like digital advancement have already begun with Fastag made
mandatory, which will increase freight traffic. Now 100 per cent FDI in the road sector is allowed which
will bring a lot of money in this sector. Govt has also come up with policy reforms in BOT and HAM
projects. The Government has made about 30 changes as a part of the reforms agenda. NHAI is
seriously working on addressing key industry issues and there is now an emphasis on the adoption of
innovative technologies, design, and material.
</p>
<p style='text-align:justify;'>
However, there are some focus areas and challenges like INR 97000 cr debt service liability for NHAI
which will burden future project funding. Therefore, there is a need for faster asset monetisation and
bring private investment. Further, there are about 888 projects which are delayed. This will require a
better project monitoring mechanism. There is a need for single-window clearances, QCBS
implementation, and policy revision in BOT and HAM projects. All such timely initiatives and proactive
action will bring positive effect in the sector. 
</p>
<p style='text-align:justify;'>
  Vinod Kumar Agarwal, Co-Chairman of the Council appreciated the efforts and action taken by
the Government in the recent past. However, he said that there are some issues that are arising due
to a lack of clarity in some of the GST provisions. As a result, contractors and concessioners&apos; are
receiving notices and the industry is not able to understand as to how to go about it". The second
issue which is hampering the growth of the industry is related to the high rise of prices of raw materials
like steel and cement. There should be some mechanism by which prices do not escalate too high. The
Government should allow new plants and encourage new entrepreneurs in this segment so as to
ensure sufficient availability of these raw materials. Govt schemes like InVit need inventors&apos;
confidence. This would require clear, simple, and transparent rules so as to decide risk factors in a
project.   Agawal was requested to send a draft letter on these suggestions to ASSOCHAM for taking
up with the Government.
</p>
<p style='text-align:justify;'>
<b>  Sandeep Reddy</b> Co-Chairman of the Council suggested having a strong single-window clearance
system for speedy implementation of projects. Further, the coordination between Centre and states
should improve because the centre has embarked on a huge infrastructure plan but the
implementation part is not vibrant as the same remains with states. Hence, the centre should make a
mechanism where states move implementation faster.
</p>
<p style='text-align:justify;'>
<b>During the floor participation, the following major suggestions were made:</b>
</p>
  <p style='text-align:justify;'>
  &#9679; The current procurement system is highly leaned towards least priced quotations or bids.
  INFRACON portal is not effective as many CVs of experts and individuals are fabricated as no
  one can find out which one is right or wrong. Even one individual can have multiple CVs. As a
  result, unrealistic lower prices are quoted to grab the Job. Despite the fact that a particular
  work can not be done below a certain cost, prices as low as 40% are quoted. Under such
  mechanism, the quality of work is compromised. Hence, there should be some minimum cutoff price below which no one can bid for a job. Since the Ministry is a single point authority,
  QCBS should also be uniform.
  </p>
    <p style='text-align:justify;'>&#9679; Currently, many agencies are engaged in carrying out the investigation and checking the
    roughness of pavement and road surface. But it is a matter of concern to note that different
    agencies are giving different results for the same project. Therefore, there should be some
    regulatory authority to monitor the authenticity of investigating agencies. Alternatively, only
    those agencies should be assigned the investigation job who can give reliable data, else the
    whole exercise of the investigation will be misleading for road users.
    </p>
    <p style='text-align:justify;'>
    &#9679;   Balkrishan Goenka, Past-President, ASSOCHAM stated that the
    government has given relief to PPP- Toll projects by giving extra time for Toll
    collection due to pandemic. "However, for HAM projects the only way to
    compensate for the losses due to the pandemic is to compensate for the cost
    incurred for interest during construction. A request is that interest on debt
    amounts outstanding at the beginning of March 2020 be compensated at the
    MCLR plus 1.25 for a period of 6 months," said   Goenka, Chairman,
    Welspun Group.</p>

    <p style='text-align:justify;'>
    &#9679; During the Covid, Govt had announced some measures for a performance guarantee. But now
the performance guarantee and security which is about 22 per cent is substantially high.
Overall Bank Guarantee exposure should be 10 per cent. As contractors are already providing
performance security, the provision of advance retention money should be done away with.</p>

    <p style='text-align:justify;'>
    &#9679; There has been a good number of initiatives and circulars about the adoption of new
    technologies but practically nothing has happened at the ground level. There is resistance at
    the bottom line of implementing authorities. ASSOCHAM should keep one focus area on the 
    use of new technologies. The Government should make it compulsory to apply new
    technology, design, and material in certain projects. It was decided that a small group of 4-5
    members could discuss and present its findings and suggestions at the next webinar for wider
    discussion on the subject.   Manpreet Sethi was requested to lead the group along with
    prof. Dharamvir and a few more members who could give their valuable suggestions on the
    subject.</p>
    <p style='text-align:justify;'>&#9679; Keeping in view climate change and its impact, guidelines for extreme environmental impact
    areas should be revised.   Shushil Gupta was requested to give more details about the
    issues involved and suggestions in this specific segment, so that views of other members could
    also be taken up on this specific subject.</p>
    <p style='text-align:justify;'>&#9679; It is always good practice to adopt the best international tools. For example, Japan is using
    RAP-Recycle Asphalt Payment up to 70 per cent. Though many people in our Govt and private
    sector are aware of new technologies but there is a huge problem with their applications.
    There is a need to train and encourage all people who are engaged in this area.</p>
    <p style='text-align:justify;'>&#9679; The reliability of quality control data is a question mark. Hence, there should be some
    mechanisms under which payment of bills is clubbed with quality of work.</p>
    <p style='text-align:justify;'>&#9679; There seems to be misuse of overlays as, despite the good condition of some of the roads,
    overlays are being done without milling on it. Some old mindsets people prefer overlaying
    instead of recycling. </p>
    <p style='text-align:justify;'>
    &#9679; In the Post covid scenario raw material has become costly and also there is uncertainly of its
    uninterrupted supply. The Government should consider giving some relief to the contractors.
    Inverted GST structure is an important issue and there is a need for rationalising GST on input
    and output. GST paid on advances against work contract is not justified and it should be
    abolished. Tax at source should be removed as it blocks cash flows.</p>
    <p style='text-align:justify;'>
      D K Sen informed the Sad demise of   Patankar, a former member, technical, NHAI and
    a members of this Council who contributed immensely. Members of the council conveyed
    condolences and kept one minute silence as a mark of gratitude and prayed the almighty to
    rest the departed soul in peace.<br>
    The Meeting ended with a vote of thanks to the Chair.
    </p>
    <p>******</p>
    