Road sector projects that have got only single bids in the tender will not pass muster. The government has ordered a re-tender for the seven highway projects, worth Rs 8,678 crore, that have received single bids. The ministry of road transport and highways has directed the National Highways Authority of India (NHAI) to reduce the cost of the projects by restructuring them and invite fresh bids.
The ministry thinks the move will encourage more companies to bid next time. In February this year, the ministry had asked the Cabinet to let the projects with single bidders pass through. ?However, committee of secretaries headed by Cabinet secretary last month suggested the highway projects with single bidders be restructured and bids be reinvited,? said a NHAI official. So the projects are back on the drawing board, again.
Among the projects at stake is the Eastern Perpheral Expressway that involves construction of six greenfield access-controlled highways that will connect Faridabad, Noida, Ghaziabad and Sonepat, with a bypass to Delhi. The Rs 2,726-crore project is the costliest road project in India, for which Reliance Infrastructure had emerged as a single bidder in December last year.
?The decision to restructure six projects in which only single bidders evinced interest and invite fresh bids as per new specifications has been taken. The case of Eastern Peripheral Expressway is under consideration by the ministry. For the six projects, the process of restructuring has begun. Various structural as well as design changes will be made to lower the cost and make the projects attractive to the bidders,? said a top NHAI official.
This will further delay the construction of the roads. The single bids for all the seven projects came in only by February this year, already delayed by two months from the scheduled target of December. NHAI officials say the economic downturn made companies reluctant to bid and so tenders were put in twice till February.
Speaking on the incidence of single bids, Parvesh Minocha, MD (transportation), Feedback Ventures, the largest integrated infrastructure company in the country, said, ?There have been instances in the past when BoT toll projects have been granted to the single bidder. The practice had been to invite the bids again in such cases. And if a single bidder scenario emerges in the second bidding also, it is left to the competent authorities like NHAI chairman or road transport and highways secretary to take a decision.?
Explaining the reason behind the move, a top ministry official said restructuring the projects will lower the cost of the projects and make them more viable for private players. ?The projects are being restructured with a view that new physical as well as funding specifications will encourage the private companies to take them up,? he added.
The process of restructuring envisages increasing the viability of projects by making structural and design changes like reduction in the number of underpasses, flyovers, which will help reducing the cost of the project. The projects are part of the National Highways Development Programme, phase III, and private participation was invited on a build-operate-and-transfer basis.
Among the mega projects that will see invitation of fresh bids include Rs 2,380-crore Chilkaluripet-Nellore project and Rs 1,170-crore Maharashtra border-Nagpur project.
Reacting to the move, M Murali, director general, National Highways Builders Federation, said, ?Taking up the projects again on a BoT basis will not help, as the same set of people will come in. However, an annuity model may help, as the risk on the private participant is comparatively less and there is a government guarantee.?