The Road Transport and Highways Ministry has pinned hopes on engineering- procurement-construction mode for project awards to pick momentum, amid a poor show and consequent scaling down of the annual target to almost half at 5,000 km for 2013-14.
“All public funded National Highways projects, and centrally sponsored road works ... costing more than Rs 10 crore would henceforth be awarded on EPC (engineering, procurement and construction) mode of contract,” the Ministry said in a recent notification.
The Ministry has already clarified that it has decided to adopt this road building approach for projects which are not viable on Public Private Partnership (PPP) basis.
The 12th Five Year Plan (2012-17) envisages construction of 20,000 kilometres of two-lane National Highways based on EPC mode.
The development comes in the wake continued dismal show in award of projects by the Ministry.
The Ministry could barely award 1,400 km of projects against a target of 9,500 km last fiscal and subsequently scaled down its projects award target by nearly half to 5,000 km for this fiscal.
It had cited lukewarm response by the bidders last fiscal owing to a number of factors including delay in clearances.
Under the EPC model, the government spends the entire money required to build roads which may prove lucrative to builders.
The EPC document has been structured in a manner that time overrun and cost overrun in implementation of national highways works shall be minimised to a great extent and there will be optimisation of design and quality construction.
The EPC mode assigns the responsibility for investigation, design and construction to contractors for a lump sum price awarded through competitive bidding, wherein provision for index-based price variation is made.