NHAI’s new bidding system to restrict bidders on financial strengthhttps://indianexpress.com/article/news-archive/web/nhais-new-bidding-system-to-restrict-bidders-on-financial-strength/

NHAI’s new bidding system to restrict bidders on financial strength

A few large players are set to dominate the bidding process of 10 mega projects identified for development of major roads by the National Highways Authority of India.

A few large players are set to dominate the bidding process of 10 mega projects identified for development of major roads by the National Highways Authority of India (NHAI) after the authority adopted the annual pre-qualification system for bidders this year. The mega projects involve a total investment of Rs 35,000 crore with the minimum size of one project being Rs 3,140 crore.

Even though there is a list of over 100 pre-qualified bidders under the new pre-qualification system adopted by the NHAI,some of these projects may be open to just about 6-10 players for financial bidding or the request for proposal (RFP) stage. The reason is that the eligibility to bid for large investment projects is directly linked to the financial size of the company.

Under the new system,companies do not need to apply for technical pre-qualification for every bid. Instead they seek a technical qualification certificate from the NHAI at the beginning of the financial year and are given a green signal to bid for projects of certain size and value. However,this may limit the number of competitive bids that the authority may get,also limiting the possibility of getting higher returns.

An example is the Amritsar-Ganganagar-Bikaner-Nagaur-Jodhpur-Pali road in Punjab and Rajasthan. The total project cost is Rs 5,640 crore for the 700 km highway,which allows just the top six players in terms of financial strength and project experience to submit bids. Those that qualify include Leighton Contractors,Plus Expressways Berhad,Macquarie SBI Infrastructure Investment,Tril Roads & Autostarde Indian Infrastructure Development,GMR Infrastructure and L&T Infrastructure Development Projects as per NHAI’s pre-qualification list.

Going by the list,even experienced players such as GVK Transportation,Reliance Infrastructure,Shapoorji Pallonji,Lanco and Gammon Infrastructure may not get a chance to bid for the project. However,individual players can join the fray and bid for big projects by forming consortia with other developers.