Indian Infrastructure Projects: it’s good to talk

By February 6, 2018INDIA, News
Indian Infrastructure Projects - Red Ribbon Asset Management - Investment India

After decades of bewildering inactivity, the Indian Court System seems to have been jolted into life.

Ask most western lawyers over the past twenty years whether Indian Courts can be relied on to deliver speedy and reliable results to complex claims and they would shuffle their feet and roll their eyes; because, historically, Indian Courts have been very bad at resolving claims with clarity and within a reasonable timeframe with litigation sometimes lumbering on for decades. And make no mistake about it, that mattered because business looks above all else for legal certainly before making investment decisions.

Happily things have been changing fast in the Indian Courts over recent years as they slough off this unhappy reputation: most evidently so in the crucial area of public infrastructure investment.

Take, for example, the decision of the Indian Supreme Court last December in the Eastern Peripheral Expressway Litigation, a cycle of claims brought by local farmers against the National Highways Authority as long ago as 1985, disputing the right of the Union Government to acquire compulsorily a critical half kilometer stretch of land required to complete the Sonepat section of the Eastern Peripheral Expressway. Launched more than thirty years ago, the litigation seemed destined to roll on for another thirty years, but the recently reinvigorated court process in that Indian Judges have become a lot more proactive. The Court ruled in December that the parties (or at least those of them who were still alive) should come together and talk things over, in a meeting room rather than a courtroom so that construction could continue for the benefit of the area at large and for the local farming community in particular. It short, it instructed the parties to talk and reach a settlement…and they did!

Indian Infrastructure Projects - Red Ribbon Asset Management - Investment India

Eastern Peripheral Expressway Projection – Red Ribbon Asset Management

The Supreme Court then turned its attention to related cases on non-distribution of compensation for land acquired earlier by the Government as part of the same highways project in Ghaziabad: the local district judge was instructed to take up matters on a priority basis as soon as the NHAI completed its proposals for payment, so the overwhelming likelihood is that the same settlement basis will be reached as in Sonepat with the result that this important Highway will at last be be free to run its full course.

Everyone’s a winner because in all the 135 kilometer long Expressway will deliver signal free connectivity between Ghaziabad, Faridabad, Gautam Budh Nagar (Greater Noida) and Palwal.

It’s a good example of just how much the Courts have changed and how much they  can do to stimulate completion of the increasing number of major infrastructure projects currently on foot across the subcontinent. How jaded now and stale are those old stories of delays in India’s court process. There’s certainly no need for our casual observer to roll his eyes and shuffle his feet.

And where India’s Court’s are taking the lead, its Local Government follows.

Over in Delhi the Union Housing and Urban Affairs Minister, Hardeep Singh Puri has called for the speedy implementation of projects under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and, tellingly, he is using the same vocabulary as the Supreme Court: “I solicit you to meet together to take full advantage of the fast-track approvals and fund releases made by the ministry under AMRUT, by expediting the implementation of projects in the union territory”. Sure enough meetings followed and the Ministry duly released the first installment of 20% of previously committed funds, amounting in all to Rs 160.46 crores.

So when it comes to major infrastructure projects at least, there seems to be a persistent theme…It’s good to talk.

 

Red Ribbon CEO, Suchit Punnose said:

With such enormous infrastructure projects being green lighted all across India on such a regular basis these days, everything from highways to monorail links to new port facilities, it’s easy to lose sight of the practical realities of bringing these gargantuan projects to completion. No matter what the scale of the funding (and it is enormous) or the vision of the developers (seemingly unbounded at the moment), unless construction proceeds with reasonable speed, it can all end up looking like so much pie in the sky. Just think how long it took to turn the Channel Tunnel into a practical reality (Napoleon laid designs for the first version of the tunnel as part of his invasion planning in 1804).

And just like the Channel Tunnel, the legal system can play a decisive part in the process. Those of us with long enough memories will recall the welter of litigation that best the Channel Tunnel Project in the 1980’s, and which was prevented from killing the development altogether only by a visionary decision of the English Courts to refer the whole mess over for speedy arbitration, which duly settled the tangle of disputes within a year.

How good it is to see virtually the same thing now happening in India. After decades of bewildering inactivity, the Indian Court System seems to have been jolted into life by the same brand of verve that is currently fuelling Prime Minister Modi’s Government.

Anyone investing in Indian projects, of whatever nature, can now do so safe in the knowledge that the Indian Courts are on their side.

 

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