Reforming Infrastructure Contracts: A Call for Early Scrutiny

In a call for systemic reform, former Chief Justice of India UU Lalit stressed the importance of rigorous scrutiny of infrastructure contracts before they are signed. Speaking at a Delhi conference, he outlined how early examination could save substantial public funds by preventing costly arbitration disputes.

Justice Lalit, citing his experience with numerous arbitrations, noted that disputes often stem from poor contract drafting and lack of coordination among agencies. Frequent arbitration claims, sometimes exceeding original project costs, suggest an opportunity for contractors to gain additional compensation, he indicated.

Addressing the complexity of infrastructure projects, Lalit highlighted the frequent occurrence of design changes and unexpected disruptions, like environmental restrictions, as contributing factors to disputes. He called for integrated mechanisms to resolve disagreements during project execution, emphasizing their significance in an investment-heavy sector reshaping India's development.