The National Highways Authority of India (NHAI) has strengthened the qualification criteria for sub-contractors in a bid to increase the safety of roads being built. It has said that private developers can sub-contract a project to only those who have already completed at least one project of more than 20% of its cost or Rs 500 crore, whichever is less.

For example, if a project costs Rs 2,000 crore, the developer can sub-contract it to only those who have

successfully implemented at least one project costing Rs 400 crore. If the developer wants to change a sub-contractor, it will have to take the prior nod of NHAI, which is the nodal agency for award of highway expansion projects. The approval, according to the decision of NHAI, will be given only if the substitute contractor meets the technical capability criteria.

?Many concessionaires of highways have been appointing more than two contractors on engineering, procurement and construction (EPC) basis for a single project, irrespective of their experience and technical qualifications. All this is affecting the safety aspects of national highways. These guidelines will prevent such practices in the future projects,? a senior NHAI official told FE .

According to sources, NHAI had found that sub-contractors having no experience of building bridges were working on the bridge that fell apart in Kota, Rajasthan, last December. However, a consortium of Gammon India and South Korea?s Hyundai Infrastructure, which was constructing the bridge, was later given a clean chit by NHAI.

?The concessionaire will have to give an undertaking to NHAI that it will follow the guidelines on appointment of sub-contractors. If the norms are violated, the concessionaire will be barred from bidding for future projects,? the NHAI official said.

The changes were made in the request for qualification (RFQ) documents in a meeting of the NHAI board last week. NHAI will now have to get the approval of road transport and highways minister Kamal Nath for these changes. The changes are going to have an immediate effect on 3,270-km projects that NHAI is to bid out by June-end.

All other future projects will also be awarded under the changed RFQ documents. Seeking to ensure that only credible bidders are awarded mega highway projects, the authority has also inserted a restricting clause in the RFQ that will prevent companies that could not achieve financial closure of two highway projects each valuing at least Rs 3,000 crore from bidding for another project.

The road transport and highways ministry has identified 10 mega highway projects, each requiring an investment of Rs 4,000 crore, and expects to invite bids for the first such project in the next two months.

In another move to avoid name-lending in the sector, the authority has decided that it will consider the financial and technical eligibility of only those members of the consortium that contribute a minimum equity capital of 26% each. ?In a large number of consortiums, the predominant share of qualifying technical and financial scores is seen to come from entities which take the minimum exposure in the consortium and also do not actively participate in the execution of the project,? another NHAI official said.