The National Highways Authority of India (NHAI) has cancelled the bidding process for 20 projects worth over R17,000 crore since 2009 despite continuous reminders from the road transport and highways ministry to award projects expeditiously to reach the target of 20 km per day road development as soon as possible. The authority’s decision, coming in the middle of a bidding process, has not only delayed projects but has also resulted in losses to the exchequer and the industry.
According to the data collected by the National Highways Builders’ Federation (NHBF) accessed by FE, the projects that were cancelled could have resulted in construction of 2,080 km of national highways at a cost of R17,212 crore. Most of these projects were cancelled due to poor planning by NHAI, which resulted in a large number of bids getting cancelled at the qualification stage. Poor bidder response and higher demand for government grant also resulted in a few cancellations at the price bidding stage.
Previous road minister Kamal Nath had in 2009 said his ministry would achieve the target (20 km of road per day) in one year but had to postpone the deadline thrice as NHAI could not award the requisite number of projects. The current minister, C P Joshi, has said that the target is achievable only by 2014. Only 9.09 km of national highway was being built a day as on December 31, 2010, according to the latest figures released by the government.
The developers allege that the bids were cancelled without giving any reasons to them. ?In many cases, NHAI cancelled the bidding process at the last stage, by when we had spent a lot of money on preparation of bid papers,? a senior executive of a private road developer said on the condition of anonymity.
According to industry estimates, a company has to spend R50 lakh in preparing papers for a project costing R1,000 crore. The costs of cancelled projects were within the range of R6.94 crore and R3,550 crore, according to the NHBF data. While three projects were scuttled during financial bidding, 13 were cancelled before technical bids were received. Some projects were also cancelled before finalisation of the tender documents, the data show.
A senior official in NHAI said, ?It is not that we don’t re-bid the project after cancelling it once. Sometimes we have to re-bid the project for reasons that may be beyond our control. In some cases, we may also like to get better bids considering the expected traffic on the stretch.”
The bidding process generally takes minimum six months and if the project is re-bid the total time taken gets stretched, delaying the award schedule. NHAI had bid out 3,368 km road construction contracts in 2009-10 and 5,100 in 2010-11. In the current financial year, the authority wants to award 7,300-km projects.
On being asked whether NHAI explains the reasons for cancellation, the official said, ?Although we don’t do that on our own, we do tell the reasons if the bidders ask us. We don’t have a closed door for bidders?.
