The National Highways Authority of India?s (NHAI) plan to award 44 highway projects by December this year may get delayed. All the shortlisted bidders have withdrawn from seven projects at the financial bidding stage already.
Among the major stretches that have seen withdrawal of all the shortlisted bidders are MP-Maharashtra Border Dhule, Tirupati-Tiruthani-Chennai, Vijaywada-Machilipatnam, Kundapur-Surathkal, among others. These four projects combined together are worth around Rs 2,500 crore.
The shortlisted bidders have withdrawn quoting the additional clause introduced by the ministry of road transport and highways in August this year. The ministry in a letter to NHAI on the issue said, ?A bidder shall not be eligible for bidding if the bidder was during a period of two months preceding the bid due date, either by itself or as a member of consortium qualified earlier for bid stage in eight or more projects or declared as selected bidder for four projects.? This is applicable on all the 53 projects, which the NHAI put on block in September this year.
The projects are a part of Lot I of national highways development programme, phase III. There are 23 projects in the lot worth around Rs 30,000 crore. More than half of the projects have seen withdrawals by highway builders at the financial bidding stage. The bidding for all the 44 projects under phase III is scheduled to be over by December this year. However, had NHAI followed its schedule for financial bidding, it would have wrapped up the process for at least fourteen projects of Lot I by now.
But NHAI, which attributes the delays in the process of tendering to the prevailing economic uncertainty, is confident of awarding the projects within the specified timeframe of December this year. ?We have deferred the dates for submission of financial bids for the convenience of the bidders as they need more time in the current economic scenario,? said NHAI official.
Construction major Larsen and Toubro, which was shortlisted for financial bidding of 15 projects withdrew from eight. Reliance Infrastructure, which had been shortlisted for 13 projects, has withdrawn from nine projects. Similarly, GMR Infrastructure has withdrawn from six projects.
Speaking on the withdrawals by the companies quoting the clause, a Planning Commission official said, ?The regulation has been imposed to avoid monopoly situation. As far as the projects that have seen withdrawals by all the bidders are concerned, NHAI will take due action in that case.?
NHAI, on its part has its alternative ready to deal with the situation. The projects where all the bidders have withdrawn at the financial bidding stage, those next in line during the technical evaluation stage, will be invited to participate in the financial bidding process. No fresh bids will be invited for either of the two project.
As per the guidelines for PPP projects mentioned in the model concession agreement prepared by the Planning Commission last year, the process of awarding projects is divided in two stages. In the first phase bidders are shortlisted on the basis of technical experience and scoring is provided. The top five-six scorers are then invited to submit the financial bids for the project. The Prime Minister?s Committee on infrastructure approved the guidelines in December 2007.
The clause imposing the caps on the number of projects a bidder can take up has been challenged in the court. However, taking cue from the court?s decision on another clause capping number of bidders at financial bidding stage at top five/six, it is unlikely that the bidders will get any reprieve in this case as well. The Delhi High Court in its judgment on Monday said, ?The government has the right to implement, amend any rules and regulations on the policy matter, which may be implemented from time to time. Since it is a government policy decision to exempt the deletion of clause 3.5.2 (cap on number of bidders for financial bidding) in model concession agreement in 60 projects, the court feels they should not interfere in policy decisions.?