Highway builders want clearances in place before bids invited

The apex body of highway builders NHBF has written to Prime Minister Manmohan Singh seeking a direction to NHAI to invite bids only after land acquisition and other clearances are put in place.

In a letter to the Prime Minister, National Highways Builders Federation said the sector is going through a difficult phase wherein many projects have yet to achieve financial closure while those who have attained it are not getting a date to start work due to delays in environment/ forest clearances and problems in land acquisition.

Bids pertaining to BOT projects should be invited only in case where most of the clearances including land acquisition are in place, the letter said. It also said at least a stretch of contiguous 25�35 km should be in possession of NHAI before inviting bids.

The development comes at a time when some of the highways builders and NHAI have locked horns over issues like delays in clearances.

NHBF has a large number of developers as members including GMR and Larsen and Toubro.

NHBF in its letter has demanded that the time period stipulated for achieving financial closure by the developers should be based on the total project cost of the contract.

"For example, the projects with TPC of more than Rs 2,000 crore should be given 270 days instead of 180 days which is at present applicable to all projects," it said.

It also demanded that environment and forest clearances should be obtained by NHAI before the issue of request for proposals (RFP) besides necessary pacts with states.

Citing problems in meeting equity requirements, the NHBF has also asked that "the concessionaire should be permitted to exit the project once the commercial operation dates is achieved so that he can be relieved of its obligations for undertaking new projects."

"It is common fact that bidders sometimes bid unworkable price and therefore, offer high premium to NHAI. This results in either not achieving the financial closure or finding it hard to go-ahead with the project. NHAI should work out some methodology to ignore the bids of those bidders who offer unworkable price," it said.

If NHAI succeeds in weeding out unworkable bids and select the most competitive bidder against the workable amount then it would be convenient for all stakeholders, it added.

The Prime Minister's Office (PMO) had yesterday deliberated on the issues impacting road sector and the Ministry of Road Transport and Highways may announce compensation to developers for delays in clearances to projects.