Indian cos may get the edge in road projects

The Planning Commission is contemplating a proposal to give special weight to the domestic infrastructure companies over their foreign counterparts for their experience in construction projects in the country.

This comes in the face of domestic infrastructure companies accusing the central government of giving preference to the foreign companies through the new eligibility norms in awarding contracts.

The move by the Planning Commission follows concerns raised by the National Highways Authority of India (NHAI) and the highway builder’s federation over the new eligibility criteria in which foreign companies tend to score higher than the domestic ones.

“We have received various representations over the new eligibility criteria which enables foreign bidders to score higher than the Indian bidders. This, in the long run, may lead to a major chunk of the infrastructure projects being bagged by foreign companies. To address this issue and ensure a level playing field, we are considering whether an additional weight of 30 to 33 per cent be given for projects developed or constructed in India,” a senior government source said.

Other sources add that as the foreign companies will not have much experience in India, domestic construction companies would have an advantage over foreign players.

Under the new eligibility norms formulated by the Planning Commission and the finance ministry in 2007, scores are assigned to the bidders based on various criteria in which their past experience(including global), net global worth and the value of projects undertaken across the world in the core sector (ports, power, petroleum, pipelines amongst others) are given high weight. Based on these scoring, top five or six bidders will be shortlisted for the financial bidding stage.

Since overseas infrastructure companies have wide experience in all these areas, they emerge as the top contenders for any highway project in the country.

The main reason for formulating such stringent criteria is to ensure that world class infrastructure is built in India. As a result, domestic companies have formed consortiums with a foreign partner to jointly bid for infrastructure projects.

However, in most cases, actual expertise and technology does not get transferred at the ground level and a foreign partner is roped in to a consortium for scoring higher points, according to an infrastructure company.