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India is gearing up for a major highway construction initiative in line with the 2047 vision of the Narendra Modi-led NDA government. This new plan, set to replace the Bharatmala Pariyojana, aims to enhance connectivity across the country. The upcoming program will define clear criteria for identifying nationally significant roads and introduce changes to the Model Concession Agreement. We crafted these changes to simplify infrastructure development, prevent contract disputes, and lessen legal problems.

According to an official, future projects will be awarded under this fresh scheme, distinct from Bharatmala. The government is modifying the Model Concession Agreement to tackle past disputes with contractors, alongside a shift in approach. Past court cases inform changes to fix issues, improving laws for better project implementation and quality road construction.

One proposed change suggests that disputes involving claim values up to Rs 50 lakh may not require arbitration. For larger amounts, neither the government nor the concessionaire can claim interest before or during disputes. Include government arms as joint beneficiaries in concession period insurance to compensate for project failures, as advised.

Since the launch of the Bharatmala project in October 2017, India has been constructing over 10,000 kilometers of national highways annually. The initial goal was to build 74,942 kilometers of national highways, with 34,800 kilometers approved for development in the first phase until September 2022, requiring an investment of Rs 5.35 lakh crore.

Bharatmala has already granted contracts for 27,384 kilometers of highways, completing 15,045 kilometers. However, worries arise due to rising scheme expenses.

In the future, upcoming national highway contracts will likely employ the Build Operate Transfer (BOT) model, requiring less government funding. Jagannarayan Padmanabhan, Senior Director of Transport Logistics and Mobility at CRISIL Ltd, stated that they have auctioned around 11 stretches, amounting to Rs 22,000 crore.

Industry experts believe these BOT projects will help the government achieve its targets and expedite national highway construction.

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