Govt targets small disputes choking highways with new resolution panel

₹20,000 crore that have slowed highway development in the country.The pre-conciliation committee, set up by the ministry of road transport and highways (MoRTH), will attempt to resolve disputes valued under ₹5 crore between highway contractors and government authorities before they snowball into prolonged legal battles, according to two government officials aware of the development.The development assumes significance given that these small-value disputes account for a fifth of the nearly ₹1 trillion legal claims in road and highway construction that the government has been party to over the past decade. Also, there are documented cases of sub- ₹1 crore road payment disputes where contractors had to wait for 6-7 years for resolution.

Interest and legal costs increase the government’s liability far beyond the original claim by the time disputes are finally resolved.“A reported example is a ₹27.5-lakh unpaid road bill in the Yadgir (a district in Karnataka) PWD (Public Works Department) project, where once interest and enforcement costs were added over several years of delay, ultimately resulting in a court-directed recovery of approximately ₹1.2 crore,” said Anuradha Mukherjee, partner (head, disputes, north India), Cyril Amarchand Mangaldas.MoRTH's concern over mounting highway-related disputes, along with its push to control legal costs, highlights a broader challenge—the government’s prolonged battles in courts and arbitration that continue to drain the public exchequer. In the past 10 years, the government has faced adverse arbitration awards topping ₹30,000 crore, indicating an urgent need to dispose of pending matters.The move to set up the committee comes in the backdrop of MoRTH's focus on reducing its legal