The Hindu Business Line : Ministry’s new rule forces cos to withdraw bids for highway projects

From the National Highways Authority of India (NHAI) project to widen Rimuli-Roxy-Rajamunda stretch, all the six shortlisted bidders have opted out, where as from the Chandikhole-Dubari-Talcher project, five of the six shortlisted bidders have withdrawn.

This is due to a rule recently introduced by the Ministry of Road Transport and Highways that bars companies from bidding if they have been short listed in the technical qualification (request for qualification) stage for eight projects during a two-month period (preceding the due date for financial bid), or if they have won four projects during the specified period.

The Road Ministry had directed NHAI to add this clause in the request for proposal (RFP) for 53 NHAI projects, bids for which are under process when it faced severe opposition to the controversial competition-limiting clause in the request for qualification (RFQ) stage.

Incidentally, the Finance Ministry has now decided to delete the competition-limiting clause (that specifies only top five-six qualifying bidders should participate to the RFP stage) for all highways projects prospectively.

So, bidding for 60 projects (including the 53 projects which are under process), will continue as per the RFQ with the competition limiting clause and the new RFP rule.

With this, out of 16 projects for which NHAI has invited the RFPs or financial bids, nine have now been affected on account of bid withdrawals.

FIRMS WITHDRAW BIDS

This is because companies have started withdrawing their bids from several projects which they consider relatively “unattractive”.

In seven such projects, four shortlisted bidders have stepped back. The projects are: widening of selected stretches between Ghaziabad-Aligarh, Amritsar-Pathankot, Tirupati-Tiruthani-Chennai, Jaipur-Reengus, Panikoili-Rimuli, Muzaffarnagar-Haridwar-Dehradun and Rohtak-Hissar.

For all such projects — since NHAI had invited RFPs from top six bidders — the authority needs to revisit the RFQs, select the top scorers from the remaining bidders in the queue and invite RFPs from them. This is to ensure that five-six bidders continue to compete at the RFP stage.

Now, the RFP stage can move forward only if the new selection of bidders do not back-off.

For instance, in the Ghaziabad-Aligarh project, Larsen and Toubro, which was shortlisted after three of the originally selected bidders opted out, has decided to withdraw its bid.

Incidentally, National Highways Builders Federation, which had moved the Delhi High Court against the competition limiting clause, has also challenged the new clause in RFP.