The Centre plans to introduce bidding among states for infrastructure projects, hospitals, educational institutions and for hosting national events. According to a communication from the Cabinet Secretariat, the NDA government plans to adopt the Swiss Challenge Method for “selection of location” for future IITs, IIMs, AIIMS, ports, refineries, LNG terminals and food processing units, as well as film festivals, national games and Pravasi Bhartiya Divas, among others.
Depending on the issue, states would have to compete over ease of providing land, extent of fiscal concessions, connectivity, provision of utilities, speedy statutory clearances, and quantum of employment to be generated.
Different weightage would be assigned to each parameter, to arrive at a cumulative score. The state with the highest score would be the winner for a particular project, institution or event.
“The basic intent of the Challenge Method is to provide a transparent, objective and merit-based decision-making process, that may be adopted for site selection across various sectors and to encourage competition among states to offer the best-suited sites and commit resources in terms of infrastructure support, financial incentives etc,” says the letter.
Each department has been asked to submit a list of projects, institutions or events under them with a matrix of indicative parameters and possible weight assigned to each parameter to the Cabinet Secretariat by this month.
The collated list would then be put up in the public domain for any state to start the bidding. A state’s original offer would be made public so as to invite competing counter proposals that would have to better the initial offer.
Under the Swiss Challenge Method, if a third party’s bid is more efficient, the first bidder is asked to resubmit a fresh bid. If the first bidder comes up with a better proposal, it gets the project, and if it fails, the one with the more efficient bid wins the project.
The Challenge route has been widely used in recent years, with the Central government approving redevelopment of 400 railway stations via this method. It has also been used by states to award roads and housing contracts.