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National Highway Authority of India (NHAI) bid norms relaxed, failed to attract investors' interestBy Dr arvind, Section News
The National Highway Authority of India (NHAI) has relaxed the norm limiting a bidder to bid for more than eight road projects as certain stretches have failed to attract investors' interest due to the current economic slowdown. This flexibility will be applicable for those projects that have received less than five price bids. The move is expected to benefit large infrastructure companies like GMR, L&T, Gammon India, Reliance Infrastructure and Simplex who have shown interest in National Highway Development Programme (NHDP) projects. Prevailing norms say that a company (as standalone or as a consortium) cannot bid for more than eight projects and cannot be awarded more than four projects.
As per the changed rule, six players would be short-listed for bidding in each road project. However, if companies withdraw and the number of bidders falls below five, NHAI would make fresh offers to all pre-qualified bidders. Click on "Full Story" for more...
The changes assumes importance as bidding for 60 odd highway projects (under NHDP phase-III and phase-V) worth Rs 65,000 crore is underway and has to be completed by the end of the year. However, out of 27 highway stretches for which initial bids have been received and evaluated, 16 are left with less stipulated number of bidders. These include road projects in Kerala and Bihar. The projects include building and widening about 6,500 km of roads across the country.
"Several projects under the NHDP Phase-III and Phase-V have received less than the stipulated six price bids due to waning investor interest on the back of the ongoing slowdown. We have issued a circular that modifies existing norms and encourages companies to participate in the bidding process," said an official of NHAI who did not wish to be identified. Under the clause 2.1.18 of request for proposal (RFP) of NHDP projects, cap was put on number of projects as per international norms and to prevent monopoly of few large players. Under it, the bidder is unable to achieve financial closure for minimum two projects within the period specified in the concessional agreement, the agreement would be terminated by the authority. The bidding norm also restricts the number of companies submitting their bids to a maximum of six for a project. From: Economic Times, November-21-2008
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