In the hope of attracting better bids for BOT (toll/annuity) roads projects, the road transport and highways ministry is set to virtually double the time given to developers for filing their request for proposal (RFP) starting April 1. From 45 days earlier, the ministry will now provide bidders 90 days to submit their RFPs after the request for quotation (RFQ) is submitted.
The move will give developers sufficient time to tie up funds for the projects and for due diligence, experts said.
The move to increase the time-frame to 90 days will also put the time-frame for RFP on international standards where 90 days is the accepted standard, experts said.
According to sources, lenders, including leading public sector banks, have been raising this issue with the highways ministry and the National Highway Authority of India for a long time as they already have overleveraged exposure to the roads sector and would like to go slow before they give their consent for lending. Experts see this move leading to a revival in developers’ interest for BOT projects.
The move comes in wake of past year’s experience where the government had launched a number of bids where the queue of developers was huge in the RFQ stage but by the time RFP was launched, none of the developers could participate because they could not tie-up funds. A formal notification on this is will be soon issued.
The need to provide more time to all stakeholders also comes in the backdrop where the government, so far, has only managed to award roads project of around 2,000 km in the last nine-months of the current fiscal. However, now it aims to award 3,000 km worth of roads project in the balance three months till Ma-rch 31, official sources said.
The additional time will also provide the government an opportunity to the obtain necessary clearances, including land acquisition, environment and forest clearances and state approvals among others.
?This gives a cushion to the lenders to know the exact status of the project so that they do not land up in a fix where the land requirements and other statutory clearances are pending,? said a senior government official.
According to officials, by April, the roads sector may see over two dozen road projects getting necessary government approvals, entailing combined investments worth over R6,000 crore. ?Around two-three project proposals may be cleared in every meeting of CCEA in the next one month,” a source said. Projects with less than R500 crore investment will now be approved by the road ministry itself.