NHAI slaps notice on infra biggies, threatens 3-year ban

NEW DELHI: National Highways Authority of India (NHAI) has issued show cause notice to over a dozen infrastructure companies, including L&T, Soma Enterprises, Essel Infrastructure, Gammon India, MBL Infrastructure, Ashoka Buildcon, HCC and Supreme Infrastructure, asking why they should not be barred from bidding for highway projects for 2-3 years. 20 highway projects executed by these companies were terminated for builders' 'default'.

The companies have been asked to submit their responses by Monday. NHAI, which had uploaded the list of companies and the projects that were terminated, pulled it down on Friday after highway developers criticised this move.

Sources said the list of companies were prepared based on the number of projects that were terminated from April 2014 and July this year. These companies had bagged the projects.


A top NHAI official said the notices have been sent as a part of of the process and there are provisions that the authority can debar such contractors for three years in case of public-private partnership projects and three years for government funded works or known as EPC. "We have issued letters asking them to explain what steps can be taken? This includes whether we can debar them," the official added.

Sources said the decision to upload the list was taken a meeting of senior NHAI officials. "The authority should have sought companies' response since many have failed to deliver. But making their names public could have been avoided," a highways ministry official added.

NHBF, the umbrella body on NH builders, has lodged protest against the NHAI move and has even written to PMO. "How could the authority put the names in public domain before giving them an opportunity to explain. In a couple of cases, contracts were terminated by NHAI for their own default. How can they put everyone in one basket? These companies are at risk of not getting work from other agencies after their names as 'defaulters' is made public." asked P C Grover, secretary general of NHBF.

Officials admitted this step was extreme, they added the government should come out with a mechanism to ensure that such companies don't get fresh project until they finish ongoing projects.