1. HDFC chief Deepak Parekh wants old road building model trashed; here’s why

HDFC chief Deepak Parekh wants old road building model trashed; here’s why

State governments should look at changing their contracting model for building quality roads that last longer, rather than being forced to re-do them after every monsoon season when they get damaged because of heavy rains, Deepak Parekh, chairman of HDFC and also member of the AECOM Global Advisory Board, said on Wednesday.

By: | Published: September 1, 2016 6:38 AM
In this context, Parekh noted that Mumbai had recently barred five contractors from bidding for new projects, since the roads they had built earlier were of poor quality.

In this context, Parekh noted that Mumbai had recently barred five contractors from bidding for new projects, since the roads they had built earlier were of poor quality.

State governments should look at changing their contracting model for building quality roads that last longer, rather than being forced to re-do them after every monsoon season when they get damaged because of heavy rains, Deepak Parekh, chairman of HDFC and also member of the AECOM Global Advisory Board, said on Wednesday.

“Quality is very poor and every monsoon after the rains, we have to re-do the roads. This is because state governments have to award to L1 (lowest bidder) as per the rules. And the lowest-price bidder will always build a shabby road because he underbid it and so, every year, you have to spend,” Parekh said.

He said the country needs better contractors and for this, governments could experiment with different models including the public-private partnership (PPP) model to build quality roads in cities, while states should also spend more to build such infrastructure.

In this context, Parekh noted that Mumbai had recently barred five contractors from bidding for new projects, since the roads they had built earlier were of poor quality.

US-based infrastructure design and consultancy company AECOM’s chairman Mike S Burke said that the major challenge for building infrastructure projects in India would come from the financing model of the projects, and called for tweaks in the PPP model to encourage more private-sector investments.

“There is never going to be enough public money to satisfy all the transportation and infrastructure challenges. So we need to build the private sector and public sector together,” Burke, who is also the chief executive of AECOM, said. “Changing financial structure will accelerate the pace of PPP so that we can bring in more private-sector money from both inside and outside the country.”

For the current fiscal, AECOM expects its India operations to grow 30% during the next financial year that begins in October for the company, after a 25% growth during the last fiscal, Burke said.

As part of its plans to deepen presence in India, AECOM plans to hire 450 people, including 150 for its Global Design Centre, by the end of the year. Currently, the company has more than 2,700 people across its 15 offices in the country, with 200 of them working at its Global Design Centres in Bengaluru and Gurugram.

In India, AECOM has been involved in major infrastructure projects worth $60 billion, including the Dholera New City Development in the Delhi-Mumbai Industrial Corridor, planning for the Smart City Challenge for the municipal corporations of Visakhapatnam, Chandigarh, Ludhiana and Tirupati, waterfront development at three large riverfront projects for the Gomti, the Yamuna and the Ganga rivers, and AMRUT mission in Andhra Pradesh, among other large projects. It is also involved in strategic projects such as planning of the Ganga basin, Chenab railway bridge in Jammu & Kashmir, Sewerage Master Plan of Delhi and Master Planning for Global City, Gurgaon.

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