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Saturday, 02 March 2013 00:00
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A roads regulator is long overdue

Given the Rs 20,000 crore or so of funds that are locked up in disputes between NHAI and various road contractors, the Budget’s promise of a roads regulator likely to be in place soon is a good thing. Right now, with NHAI acting as both the concessioning authority as well as the final arbiter, there is a serious level playing field issue that contractors face. An independent appellate authority, an integral part of the regulatory process, is important for boosting investor confidence.


More than this, however, is the larger need to bring in more flexibility in, for instance, tariff setting. Right now, there is just one flat tariff that applies to all roads irrespective of what type they are, of traffic flows, or even the category of traffic. A regulator, as in the case of other industries, can use a process of consultation to evolve different formulae for different types of roads. In the electricity sector, for instance, when tariffs are decided, public consultations are called for from all stakeholders. Nor should the process be restricted to just tariffs. Service quality standards are equally important. While technically there are service standards even today, in the case of the Delhi-Gurgaon expressway, it took NHAI months to even react to the hours of delays faced by commuters. Relooking of contracts, as is being done by the Central Electricity Regulatory Commission (CERC) in the case of some ultra mega power projects, is also something that is easier in case there is a regulator. Regulators, it is true, are no panacea and a large part of the electricity mess can be traced back to power regulators who have not done their job, but the process of depoliticisation cannot begin without an independent regulator in place.


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