Effective resolution

Arbitration, and not conventional litigation, is best suited to resolve infrastructure disputes, say Nilava Bandhopadhya, Zeel Gondilya and Stuti Singh.

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India is currently experiencing a historic infrastructure boom, characterized by an unprecedented surge in government spending and ambitious mega-projects. Capital investment in infrastructure reached a record Rs. 10 lakh crores in 2023-24, marking a substantial 33 per cent increase over the previous year. This monumental outlay aims to transform the nation’s highways, railways, and logistics networks, with the construction sector projected to contribute as much as 15 per cent to India’s GDP and create over 70 million jobs by the end of the decade.

The Government's investment in India’s infrastructural development has surged nearly 800 per cent in the past decade, from Rs. 1.12 lakh crore in 2014 to Rs. 10 lakh crores in 2024. A significant contributor to this surge has been the steady rise in Public-Private Partnerships (PPPs), which have opened new avenues for investment and accelerated project execution.

Complementing this momentum, Government has redefined the infrastructure landscape by a multitude of ambitious initiatives including the PM Gati Shakti National Master Plan launches with Rs. 100 lakh crore investment to enhance connectivity across over 100 cities; the National Infrastructure Pipeline, targeting Rs. 111 lakh crore in investments between 2020 and 2025 across over 9,000 projects in 34 sub-sectors, primarily energy, roads, railways, and urban projects and Bharatmala Pariyojana with over Rs. 5.35 lakh crore investment aiming to develop 266,000 km economic corridors, to name a few.

The inherent nature of these high value, complex infrastructure projects which involves technical intricacies, multiparty relationships, significant public interest and regulatory frameworks makes disputes an inevitable consequence. Such disputes can severely derail the project timelines, impact financial viability, and strain stakeholder relationships.