4 key bidders qualify for 12 NHAI projects

New Delhi, Sept 10 Four key bidders may end up competing for most of the 12 highway projects of National Highways Authority of India (NHAI), which were processed during the last few weeks. The bidders are Larsen and Toubro; a consortium including China Railway 18th Bureau Group and Maytas; consortium that includes Hindustan Construction Company and British firm John Laing; and another consortium that includes Spanish firm-Isolux and Soma Enterprise.

RFQ UNDER REVIEW

This would happen if NHAI were to process these bids according to a contentious request for qualification (RFQ) document prescribed by the Government for public private partnership (PPP) projects, which states that requests for proposal (RFP) or financial bids should be invited from five-six bidders only, instead of inviting bids from all firms who technically qualify for a project.

Pointing out that this clause limits competition and could lead to cartelisation, the National Highways Building Federation (NHBF) has already moved the Delhi High Court.

The case will come up for hearing on September 23. Incidentally, the Finance Ministry is also reviewing the matter.

LIMITING COMPETITION

“This is exactly what many companies feared. For all these 12 projects, about 20-22 bidders had put in qualifying bids.

But thanks to the RFQ clause, only six players get to compete.

And out of six bidders for these 12 projects, four are going to be same for at least eight projects,” said an industry source.

From the 12 projects, Larsen and Toubro has qualified for eight projects; CR18G and Maytas have qualified to bid for 11 projects (for six projects out of those, Nagarjuna Construction is also partner); Hindustan Construction Company and John Laing consortium get to bid for all 12 projects (they have Sadbhav Engineering as a partner for two projects); and another consortium that includes Spanish firm-Isolux and Soma Enterprise get to bid for ten projects (for six projects, they have partnered with real estate company Omaxe).

Now, while the Road Ministry has decided to add a clause to the RFP allowing a company to put in financial bids for eight projects only, companies at the receiving end are already contemplating taking legal re-course. “When the RFP document was decided by an inter-Ministerial group, how can the Road Ministry add clauses to the RFP on its own,” rued an industry source.

The projects envisage widening select stretches on national highways along Hyderabad-Vijayawada, Tamil Nadu/Kerala border-Vadakanchery, Vadakanchery-Thrissur, Muzaffarnagar-Haridwar-Dehradun, Ghaziabad-Aligrah, Rohtak-Hissar, Amritsar-Pathankot, Kishangarh-Ajmer-Beawar, Jaipur-Reengus, Tirupati-Tiruthani-Chennai, Madhya Pradesh/Maharastra border-Dhule and Pimpalgaon-Nashik-Gonde.

These projects would be undertaken on a build-operate-transfer (BOT) basis which allows the successful bidder to widen the highway and collect the toll revenues for the concession period.

Madhucon moves HC

Madhucon Projects has moved the Delhi High Court after NHAI dropped Madhucon from the initial list of six bidders who had technically qualified in the RFQ stage for the project to widen a 182-km stretch on the Hyderabad-Vijayawada section.

For the Rs 1,460-crore project, NHAI had initially invited RFPs from six bidders that included Madhucon and GMR. However, subsequently NHAI dropped these two from the list of six and invited bids from Isolux-Soma-Omaxe and Citra-Shapoorji Pallonji.

Date : 11/09/2008

Courtesy : Businessline