The National Highways Authority of India has decided to slow down the process of awarding contracts for new highway projects. This would further delay the process of modernisation and expansion of the national highways by a few months.
The slowdown has happened following a writ petition filed by the National Highway Builders Federation in the Delhi High Court, challenging the new Model Concession Agreement introduced by the finance ministry. The agreement restricts pre-qualified bidders from participating in the final bidding process.
The NHAI has already invited pre-qualification applications for around nine projects worth Rs 6,700 crore (Rs 67 billion), but is yet to award the final contracts.
Major projects include four laning of the Hyderabad-Vijayawada section on NH-9 in Andhra Pradesh at a cost of about Rs 1,460 crore (Rs 14.60 billion), four laning of the Panikoili-Keonjhar-Rimuli section on NH-215 in Orissa at a cost of Rs 1,086 crore (Rs 10.86 billion), and four laning of the Chandikhole- Dubari-Talcher section on NH-200 in Orissa.
The NHAI has also invited pre-qualification applications for around 27 projects worth Rs 30,000 crore (Rs 300 billion), which will be submitted by June.
Though the court has not stayed the bidding process, industry sources say the NHAI is going slow because of the uncertainty related with the verdict, which is expected to be delivered on July 9.
According to the sources, if the court ruling favours the builders, the NHAI would be required to conduct the whole bidding process afresh on all those projects where contracts have been awarded during the petition period.
So, the NHAI is just doing the preliminary work of inviting pre-qualification applications and scrutinising them before the court verdict comes.
When contacted, NHAI officials declined to comment on the issue as the matter was sub judice.
After the new MCA guidelines came into force on December 5, 2007, the NHAI has awarded five contracts of six laning of highways in February under Phase-V of the National Highway Development Programme (NHDP), costing Rs 5,900 crore (Rs 59 billion). Since then, no new contracts have been awarded.
Sources say that the contracts awarded in February on new MCA guidelines were for the projects whose preliminary bidding process and shortlisting had been completed before the petition was filed in the Delhi High Court on January 18.
The builders have challenged the new MCA guidelines, which permit only five players for participating in the bidding process, saying that the new policy would go against eligible bidders and result in cartelisation of the top five prospective bidders in the long run.
