Jaipur-Kishangarh highway project -- NHAI to invite fresh bids

P. Manoj

NEW DELHI, Nov. 21

THE National Highways Authority of India (NHAI) is set to invite fresh financial bids from all the five short-listed bidders for developing the six-lane highway project between Jaipur and Kishangarh on NH-8 in Rajasthan.

The move to invite fresh bids for finalising a project which has been under bidding for more than five years comes after the lone bid submitted jointly by Larsen & Toubro (L&T) and Joannou & Paraskevaides (Overseas) Ltd of Cyprus was found to be a conditional bid, which had set terms that there be deviations from the tender documents, Government sources told Business Line.

The other bidders in the fray included Reliance Industries Ltd, Bin Hafeez (West Asia) and Group 5 (South Africa).L&T and J&P, which were pre-qualified in their individual capacities, had submitted a price bid jointly to share the risks associated with the project, particularly on traffic flows.

But, the bid had sought a change in the existing arrangement prescribed by the Government for granting the upfront capital grant, the main bidding criteria which determines the award of the highway project.

As per the guidelines for disbursing the capital grant amount to private operators for boosting the viability of highway projects, 25 per cent of the grant would be given during the construction phase and 15 per cent during the maintenance stage of the project.

In the tender documents, the NHAI has limited its capital grant liability to a maximum of Rs 244 crore, out of which 25 per cent would be paid to the successful bidder during the construction phase and the remaining 15 per cent during the maintenance period of the project depending upon the amount of capital grant quoted by the bidder. The project is estimated to cost Rs 673 crore.

``However, the lone bid submitted by L&T-J&P combine wanted the capital grant to be given in one go without breaking it up into two parts,'' the sources said.

The lone bidder said that it needed the capital grant money more for the construction of the highway and would manage the maintenance portion through collection of tolls. ``If the capital grant element is given in two parts, our financial stream would go for a toss. In such an event, we would not be interested in taking up the project,'' the bidder had told NHAI.

However, Government sources said that accepting the condition put forward by L&T-J&P combine would have led to litigation on the grounds that this scenario was not known to the other short-listed bidders when the financial bids were called by NHAI in August 2000.

The board of NHAI during a meeting held on September 19 considered the lone bid, but referred the issue to the Ministry of Road Transport & Highways for a final decision in view of the changes sought by the bidder in the capital grant norms.

The Ministry is understood to have ruled that it would be prudent for NHAI to call for fresh price bids from all the short-listed bidders so as to provide a level-playing field to all.