NHAI board to get more powers

Will have enhanced say in issues related to bidding for projects.

In its bid to expedite the process of awarding road projects, the National Highways Authority of India (NHAI) board will get more powers to decide on issues related to bidding for these projects.

The move comes after the Cabinet Committee on Infrastructure (CCI) accepted a slew of recommendations made by the committee headed by Planning Commission Member

B K Chaturvedi to expedite road projects across the country.

As a result, NHAI can now accept a single bid after reasonable consideration, which earlier used to go to the Cabinet for approval. Till now, any road project can only be awarded if it gets at least two bids.

Also, to bring down procedural delays, the request for qualification, once submitted and qualified, would remain valid for one year or September 30, whichever comes early. Earlier, a bidder had to go through the process all the time.

The Chaturvedi panel recommends providing powers to NHAI to change the request for proposal and request for qualification norms, which was approved by the road transport and highways ministry. Earlier, such changes were done by the Planning Commission.

Also, issues related to the model concession agreement could be amended by a group of secretaries, including secretaries of the law ministry, Department of Economic Affairs, Department of Expenditure and the Planning Commission. And in case there are differences in opinion, the empowered group of ministers (EGoM) would take these up.

To attract more bids for projects, the technical threshold limit has been reduced from double the cost of the project to the same as the project cost. A technical threshold limit means that to bid for a project worth Rs 500 crore, the bidder must have done projects worth Rs 1,000 crore in the last five years. Also, in the event of disqualification, only 5 per cent of the bid amount would be forfeited and not the entire bid amount, which was the case earlier.

To make financing available for the concessionaires, entire viability gap funding (VGF) would be paid during the construction period. Earlier, 50 per cent of VGF was paid during the project and the rest after the project was complete.

Among other recommendations by the Chaturvedi committee accepted by CCI include no termination of contract in case traffic demand exceeds the designed capacity, and the concessionaire recovers the money invested.

The concessionaire would now get an opportunity to develop the road further with its own investment and the concession period would be extended, with an option of extending it for a maximum of five years.

An ‘exit clause’ would be introduced which will allow the lead partner (with maximum stake in the special purpose vehicle) to exit after two years of the commercial date of operation of the project.