The Hindu Business Line : Ministry favouring international players, say highway builders

New Delhi, Sept. 17 Indicating that the Road Ministry is further complicating the ongoing bidding process for 53 National Highways Authority of India (NHAI) projects by changing the rules of the game midway, the National Highway Builders Federation (NHBF) plans to take up the issue with the Finance Ministry.

NHBF is a lobby body representing the interest of highway developers and includes L&T, GMR, and Soma Enterprise as members.

Even as the contentious request for qualification (RFQ) document prescribed by the Government for public private partnership (PPP) projects is under review, the Road Ministry, in consultation with the Planning Commission, has decided to add a clause to the RFQ document.

The RFQ states that financial bids should be invited from five-six bidders only and not from all firms who technically qualify for a project as was the process till date. The NHBF has already moved court against this clause.

clause direction

Meanwhile, the Road Ministry has directed NHAI to add another clause in the bidding document for these 53 projects which bars a company from bidding if it has put in eight financial bids or won four or more bids within a two-month period.

Now, a company could be part of different consortia for different projects — all of which could have qualified for financial bidding. Adherence to this clause is likely to disturb the balance of power in many consortia. For instance, China Railway 18th Group has Maytas and Nagarjuna Construction as partner in at least seven projects; Maytas and B. Seenaiah as partner in two; and has only Maytas as partner in 11.

experience score

NHBF says that in this context, the right to choose the projects will rest with the foreign partner (CR18G) who brings in maximum technical qualification. “The domestic players will be at the receiving end as they are compelled to join hands with a foreign partner for their experience score.” Since foreign partners generally take commission from domestic players to be a part of consortium, they will start demanding higher commissions from domestic partners.

Moreover, it will be difficult to any bidder to decide the viability of all projects (for which it is selected) and withdraw from the rest of the projects within a week (the time provided by the Road Ministry). The viability of the projects requires careful evaluation of traffic, road alignment and estimated construction cost which will take at least two months, it said.

Moreover, timeline for the financial bidding process can simply be kept in such a manner that certain companies do not get adversely affected. During the last 10-12 years, about 60-80 firms have participated in the NH projects, creating large capacities.

These norms would deprive the small companies from undertaking future projects which would result in either closure of their business or making them subcontractors of the big players.

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