Construction companies will have to wait for at least three more years to benefit from the finance ministry?s move to remove the cap on bidders for road projects.
The order books of the National Highways Authority of India are already full with 53 projects, worth Rs 60,000 crore, to be completed in the next three years. The bids for the projects have been invited with the caps in force.
The bidding clause in the model concession agreement, introduced by the Prime Minister?s committee on infrastructure last December, had limited the number of eligible bidders to six companies with highest scores in the technical round. But the finance ministry has recently decided to remove the cap. That means all companies that qualify as technically sound bidders can move to the next stage of financial bidding.
While an association of builders?National Highways Builders Federation (NHBF)?has questioned the rationale behind the move, players like Hyderabad-based Madhucon and Reliance Infrastructure, which approached the court, alleging lack of transparency in the bidding process, are not planning to withdraw their cases.
?NHAI has 65 projects as of now. So, the new criteria will be applicable only on a handful of projects as it is not applicable on the 53 projects for which bids have been recently invited. Either the changes should have been made earlier or all the projects should have been covered,? said M Murali, director-general of NHBF.
A top Madhucon official said, ?We will not withdraw the case, as the move covers only the future projects and not the Hyderabad-Vijaywada project, which is a part of the 53 projects to which the new rule does not apply.?
An impending change in the bidding criteria is not the only issue plaguing the 53 projects; the ministry of road transport & highways has included an additional bidding criterion in the request for participation of these 53 projects. A bidder, either standalone or as part of consortium, cannot participate in the bidding if it has already been shortlisted for at least four projects within two months of bid due date. Also, it cannot participate in bidding if it has been pre-qualified in relation to eight projects.
?It is not appropriate to restrict a company to four projects. The decision has not considered either the bid capacity or reserves available with the bidders. In BOT projects, the bidding process cannot be restricted just by the number of projects one bids or wins?, said a Reliance Infrastructure spokesman, adding, the cost of a project and the capability to execute a project should also be considered.