The Union Ministry of Road Transport and Highways is likely to introduce changes in the norm regarding the defect liability period for EPC projects. The proposed changes in the criterion have caused disagreements between Planning Commission and the highways ministry. As per the norm, a road construction contractor will be held liable for any defect that happens to his work within five years of its completion, going by a proposed addition to the norms regarding the defect liability period for EPC projects. The NHAI will hold back a certain percentage of the project cost that will be released at the end of the contract period. The ministry is likely to approve the proposal soon. So far, the government has not built any project on the EPC; they were all on item-rate contract. In the existing item-rate model, a contractor builds the road and the government makes the payment. It is the government that pays any change in the design and input cost. The current model does not mandate the contractor to maintain the road. This will change in the new EPC model, where the project cost will be fixed and time-bound. However, Planning commission and Highways Ministry have locked horns over contractor liability. While the plan panel wants the private contractor to maintain such roads for two years, the highways ministry wants this period to be five years. The ministry is also opposing the panel's proposal to restrict the number of bidders for these projects to ensure fair and open competition. "The new criteria go against the prevailing competition law. In the past similar amendments were incorporated in the build operate and toll projects and it backfired," said M Murali, secretary general of National Highways Builders Federation.

This apart, the Union Government proposes to set up a Rs 2,500 crore special fund meant for technology and modernisation of the auto component sector. The new initiative called 'Technology Upgradation and Development Scheme' will aim to give the domestic component industry access to finance at reduced rates of interest. This has been suggested in the Report of the Working Group on Automobile Sector for the 12th Five- Year plan (2012-17). The 'Auto Component Technology Development Fund' will also be created under the same scheme. This will be used for financing half of the project cost through soft loans, with an interest subvention of four per cent that will be met from the fund corpus. Initial, funding needed to be pumped in by the government for the "interest subvention requirement" will be around Rs 300 crore.

Meanwhile, the government is working on setting up a Railway Stations Authority of India on the lines of Airports Authority of India (AAI) to develop modern railway stations across the country. "We have already announced constitution of a Railway Stations Authority of India on the lines of AAI to develop modern railway stations with all facilities. The drawing board is ready and once other formalities are over, its Chairman, Managing Director and other officials too would be announced," said Dinesh Trivedi, Union Minister for Railways.

To be created as a SPV, the planned authority will have equity participation of Ircon International (IRCON), a public company under the Union Ministry of Railways, and the Rail Land Development Authority (RLDA), a statutory authority under the railways. The authority will redevelop railway stations and have a mechanism for constantly upgrading and maintaining the passenger amenities and facilities.

Also, on the anvil are some policy changes to boost the solar power sector. The government is likely to increase the viability quotient of the sector for entrepreneurs so as to attract more firms into the sector. One of the changes will be to raise the cap on generation capacities. Currently, each project allotted under the National Solar Mission has a maximum limit of about 5 MW. The government intends to increase it to 20 MW per project and in the case of a consortium taking up a project the maximum capacity will be about 50 MW.