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NHAI board clears two annuity projects

P. Manoj

NEW DELHI, July 31

THE annuity method of building highways is set to take off with the board of National Highways Authority of India (NHAI) clearing two projects under this concept on Tuesday in favour of the lowest bidder -- G Mallikarjun Rao (GMR) Group.

The board of NHAI has decided to award Tuni-Anakapalle and Tindivanam-Tambaram highway projects to the GMR Group which had emerged the lowest bidder with six-monthly annuity quotes of Rs 29.48 crore and Rs 41.85 crore respectively.

With the entitlement criteria of awarding only two projects to the lowest bidder from among the three put on tender coming into play, the NHAI board has directed the highway authority management to explore whether the second lowest bidder, Unitech-BFL co mbine, with a annuity quote of Rs 47.95 crore for the Dharwad-Belgaum project was keen to match the lowest annuity quote of Rs 37.59 crore submitted by the GMR Group, Government sources told Business Line.

``The NHAI has managed to get reasonable rates after struggling with it for almost a year. This is a very, very good beginning as far as implementing highways under the annuity route is concerned'', the sources said.

Under the annuity method, the private operator will not collect tolls from the users of the highway facility but will be paid a fixed semi-annual sum termed `annuity' by the NHAI during the concession period to compensate the operator for the capital cos ts, operation and maintenance expenses of the project and returns thereon.

The annuity method is traffic-neutral since it removes the traffic risks from the project.

The NHAI board, which met on Monday and Tuesday, also decided to equip the authority to talk to the lowest bidder for the Panagarh-Palsit highway project wherein the Malaysian consortium of Gamuda-WCT combine had quoted the lowest annuity amount of Rs 69 .8 crore. Panagarh-Palsit was identified as the pilot project for implementing the annuity concept.

During an earlier meeting, the NHAI board had deferred a decision on the project on the grounds that the price quoted by Gamuda-WCT was on the higher side and had asked the NHAI management to discuss the issue with the lowest bidder and refer the proposa l again to the board, the sources said.

The NHAI board also cleared highway projects totalling about 700-800 km on the Golden Quadrilateral and the North-South and East-West corridors forming part of the National Highway Development Project (NHDP).

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