Monday, March 22, 2010

NHAI Modifies Bidding Norms to Speed Up Execution Of Highway Projects.

Following acceptance of the recommendations suggested by the Chaturvedi Committee’s report, The National Highway Authority of India (NHAI) has modified the Request for Qualification and Request for Proposal (RFQ/RFP) norms for Build-Operate-Transfer-(BOT) projects to resolve the procedural hurdles which have been blocking projects. 

With a view to accelerate implementation of the National Highways Development Programme (NHDP), NHAI has laid down some norms recently in the bidding documents in accordance with the provisions under clause 2.1.18 of Model Request for Proposal (RFP). The new norms make a bidder ineligible for bidding if, as on the bid date, the Bidder, its Member or Associate has, either by itself or as member of consortium been declared by the Authority as the selected Bidder for undertaking three or more projects and the bidder is yet to achieve financial closure for these projects. A bidder shall be considered as having been declared the selected Bidder for the projects of NHAI, where the Letter of award (LOA) has been issued (under Clause 2.1.18 (i)). 

Also, as per Clause 2.1.18 (ii), the Concessionaire must, mandatorily, engage only such EPC Contractors for execution of the work that have completed at least one single highway project of value at least 20% of the Estimated Project Cost in the preceding 5 years. To this effect, the Concessionaire will provide an undertaking accompanying the EPC project agreement document. 

The modified norms will impact those developers, who have outstanding LOAs but have not yet achieved the financial closure for the same, and are meanwhile seeking participation in the bidding process for further projects. All projects pending for financial closure and not merely those which are overdue will be taken into account, to determine the developers’ eligibility for the bidding process. These amendments have been introduced by the NHAI with the view to accelerate financial closure by the developers. 

According to minister for road transport and highways Kamal Nath, these amendments have been introduced following acceptance of the recommendations of the Chaturvedi Committee's first report. 


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