Sucheta Dalal :NHAI gears up to award 12 new road projects
Sucheta Dalal

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NHAI gears up to award 12 new road projects   

December 8, 2009

The National Highways Authority of India (NHAI) has completed the bid-evaluation process for 12 projects having a total length of 1,084 km and for a value of Rs10,672 crore, across various states in the country.


After acceptance of the recommendations of the BK Chaturvedi committee, NHAI has recently announced the lowest bidders for 12 highway projects, according to a release from IDFC.


“We expect the implementation of the recommendations of the BK Chaturvedi Committee to spur bidding interest in highway projects going forward, as procedural ‘pain factors’ are addressed and project economics improve. As a result, we expect sustained new flow on project awards over the next 12-15 months, in turn also driving construction order flows. Hence, companies with interests in highway build-operate-transfer (projects) and/or road construction are likely to see regular stock triggers over the medium term. The likely beneficiaries of the same would be infrastructure developers and contracting companies including GMR, GVK, L&T, Reliance Infrastructure, IRB, Gammon India, Gammon Infra, IVRCL, NCC, Lanco, etc,” said the IDFC report, after evaluating the impact of the recommendations of the BK Chaturvedi Committee.


NHAI had accepted the recommendations of the BK Chaturvedi Committee in November 2009. The committee was set up to study and suggest means of overcoming the impediments to the speedy implementation of the National Highway Development Programme (NHDP).


The implementation of these recommendations was expected to enable NHAI to achieve its ambitious target of 12,652 km and 11,092 km of road projects in FY2010 and FY2011 respectively.


The recommendations made by the committee included relaxation of conflict of interest clause, annual qualification exercise and awarding projects with single bids. As per the modified conflict of interest clause, disqualification will not apply if the level of direct or indirect shareholding of competing bidders is not more than 25% of the paid-up capital and subscribed share capital, instead of the current level of 5%. Other modifications in the process of awarding road projects—like the norm stipulating completion of 80% land acquisition before awarding of a project, and setting up of State-level land acquisition units—were also accepted.


Out of the 12 projects announced, ERA Infra Engineering has emerged as the lowest bidder in two projects in Uttarakhand. The worth of these two projects is Rs1,294 crore. IVRCL Infrastructure and Projects has emerged as the lowest bidder for two projects in Andhra Pradesh and the Madhya Pradesh/Gujarat border, carrying a total worth of more than Rs2,000 crore. Sadhbav Engineering has emerged as the lowest bidder for two road projects in Andhra Pradesh and Haryana with a total worth of more than Rs1,200 crore.


Hindustan Construction Company (HCC), NCC and Infrastructure Leasing & Financial Services Limited (ILFS) in Uttar Pradesh and B Seeniah & Co in Madhya Pradesh /Gujarat border are among the other infrastructure developers who have emerged as the lowest bidders for these road projects.


Under its work plan for 2009-10, NHAI has targeted the awarding of 122 road projects for a length of 11,947 km (worth Rs 1,066 crore). Out of these projects, ten projects have already been awarded and IDFC expects the process would be completed shortly for 12 other projects for which bid-evaluation has been completed.


In this work plan, 30 projects have been restructured to make them more attractive to potential bidders. These projects include six projects in Kerala; four in Andhra Pradesh; three each in Rajasthan, Tamil Nadu, Orissa, and UP; two in Karnataka and one project each in Madhya Pradesh, Maharashtra, Goa, Uttarakhand, Haryana and Bihar.


After the restructuring, seven of these projects have been awarded. The awarded projects include projects along the  Madhya Pradesh/ Maharashtra border on national highway (NH) 7 for a length of 95 km with total project cost (TPC) of Rs1,171 crore; Kundapur-Surathkal section along NH 17 for a length of 90 km with TPC of Rs671 crore; Amritsar-Pathankot section along NH 15 for a length of 102 km with TPC of Rs705 crore; Jaipur-Tonk-Deoli section along NH 12 for a length of 149 km and with TPC of Rs792 crore; Jaipur-Reengus section along NH 11 for a length of 54 km with TPC of Rs268 crore; Kannur-Kuttipuram section (Package-I) on NH 17 for a length of 83 km with TPC of Rs1,366 crore and Kannur-Kuttipuram section (Package-II) on NH 17 for a length of 82 km with TPC of Rs1,312 crore.

By Amritha Pillay


-- Sucheta Dalal