New Cabinet proposal to allow single bids for road projects
The road transport and highways ministry is working on a Cabinet proposal that will permit single bid projects to go through. The move follows a lukewarm response from private firms to various road projects for which NHAI invited bids on BOT basis.
By Nirbhay Kumar & Subhash Narayan, ET Bureau |
NEW DELHI: The road transport and highways ministry is working on a Cabinet proposal that will permit single bid projects to go through. The move follows a lukewarm response from private firms to various road projects for which the National Highways Authority of India (NHAI) invited bids on build, operate and transfer (BOT) basis.
The highways authority recently invited bids for 34 highway projects but it received responses for only 16 stretches. Of these 16 projects, six projects attracted only one bid each. ���We would go to the Cabinet for relaxing the existing norm which doesn���t allow awarding the project on BOT (toll) if only one firm submits its bid for the project.
The road project is, however, awarded to single bidder on BOT (annuity),��� a senior official in the road transport ministry said. In annuity-based projects, the government pays an agreed sum to developer over a period of time for investing in the project. This is generally done through annual or bi-annual installments. As against this, the concessionaire levies usage charge (toll) to vehicles in case of BOT (toll) projects to receiver its investments.
The proposed changes of allowing even single bids in BOT (toll) projects would be done by amending the existing model concession agreement (MCA). The current MCA mandates that there should be a minimum four/five bidders at the request for proposal or price bid stage. This condition has slowed down award of road projects in times of slowdown where investor interest has gone down. The NHAI has developed 1,693 kms of highways till January 31 this fiscal against a target of 2,442 kms under various phases of the NHDP.
The highways authority recently invited bids for 34 highway projects but it received responses for only 16 stretches. Of these 16 projects, six projects attracted only one bid each. ���We would go to the Cabinet for relaxing the existing norm which doesn���t allow awarding the project on BOT (toll) if only one firm submits its bid for the project.
The road project is, however, awarded to single bidder on BOT (annuity),��� a senior official in the road transport ministry said. In annuity-based projects, the government pays an agreed sum to developer over a period of time for investing in the project. This is generally done through annual or bi-annual installments. As against this, the concessionaire levies usage charge (toll) to vehicles in case of BOT (toll) projects to receiver its investments.
The proposed changes of allowing even single bids in BOT (toll) projects would be done by amending the existing model concession agreement (MCA). The current MCA mandates that there should be a minimum four/five bidders at the request for proposal or price bid stage. This condition has slowed down award of road projects in times of slowdown where investor interest has gone down. The NHAI has developed 1,693 kms of highways till January 31 this fiscal against a target of 2,442 kms under various phases of the NHDP.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
