None for the road: Govt scraps PPP plan for Rs 6,290-cr expressway project after zero bids

Written by Timsy Jaipuria | New Delhi | Updated: Apr 23 2014, 11:22am hrs
In a sign of investor disinterest in road projects, the government has decided to scrap the plan to use the public-private partnership (PPP) model to build the Rs 6,290-crore Eastern Peripheral Expressway (EPE) project.

Sources said the National Highways Authority of India did not receive a single bid for the project before the April 4 deadline and the project would now be developed in the conventional engineering procurement construction (EPC) mode.

According to officials, the bidding for the EPE project remained open for almost two months but closed without anyone showing interest.

At the time of request for qualification (RFQ), Reliance Infrastructure and IRB apart from Uniquest Infra Ventures, Srei-OHL consortium and IL&FS showed interest in the project but later all of them developed cold feet. It was the fifth time that the EPE was put out for bidding.

The EPE project, whose completion is key to easing the traffic congestion in the national capital region, was among the four projects cleared by the Cabinet in July 2013 for PPP ventures.

If the government adopts the EPC model for the 135-km EPE that will connect Sonipat, Ghaziabad and Palwal, it would be the first expressway to be built by the government.

Sources said the EPC process is likely to kick-start once the new government takes over.

According to Vishwas Udgirkar, senior director(infrastructure) at Deloitte: "The investor sentiment in the road sector is at its lowest now. Developers are not keen to pick up projects on the PPP mode. Therefore, the timing of launching such projects is not right. Also, developers are wary about the financial viability of an expressway project at this juncture due to lack of clarity on traffic projections, tariff structure."

In July last year, the Prime Minister had directed that the eastern pripheral expressway be awarded by December end.