Highway projects to be undertaken on engineering procurement contract (EPC) mode are likely to see aggressive bidding from companies such as Larsen & Toubro, Reliance Infrastructure, IL&FS Transportation, GMR Infrastructure, IRB Infrastructure and Soma Enterprises.
At least two Ministries are of the view that there should be no limit on the number of technically qualified players who can bid for such projects.
Sources said the contract document for EPC mode is under finalisation now and a Cabinet note in this regard has already been floated.
In EPC projects, the Government pays the contractor for constructing the highway and the toll revenues accrue to the Government.
About 3,500 km — close to 30 per cent of projects to be implemented this fiscal — will be bid on the EPC mode.
BIDDING MODES
Highway projects are bid via three modes — build operate transfer (BOT-toll), BOT-annuity and EPC. In the BOT mode, the developer has to operate the highway for longer durations, say, 15-28 years.
Among the three modes, the lowest risk for the private developer is in the EPC mode.
According to a top official from National Highways Authority of India (NHAI), a decision has been taken that there will be no limit on the number of bidders.
“According to my understanding, this issue has been sorted out. There will be no limit on the number of bidders,” said the official.
But highway developers say that a final call has still not been taken as the Planning Commission wants to limit the number of bidders.
“We will meet the Planning Commission officials to discuss the issue,” said National Highway Builders Federation (NHBF) Director-General, Mr M. Murali.
Competition Act
In 2011, highway developers had approached the Competition Commission of India (CCI) against an NHAI move to restrict the number of bidders for EPC projects.
This is not the first time such a clause has made it to the NHAI bidding process.
In September 2008, a similar clause — which sought to restrict the number of bidders to five — had been dropped from the model request for qualification (RFQ) document for highway projects.
The highway builders body had written to the CCI that the clause “goes against the prevailing Competition Act”.