Lukewarm response to bids for NHAI’s Public-funded projects
T
here has been a lukewarm response to the latest bids invited by the National Highways Authority of India (NHAI), which is largely attributed to the economic slowdown. Bids were invited by NHAI for the toll-collecting rights from toll plazas of stretches which are public funded. Incidentally, the economic activity of a region is gauged by the traffic on national highways in that region, considering that tolls are collected from road users there.
Response evinced only for 14 out of 17 bids:
Even though the NHAI did not receive the response it expected from bids, there were some exceptions. Out of the total of 17 highway stretches that were put for auction, response was evinced for 14 as on December 13th, 2013. Considering the response received on bids for the 14 highway stretches, NHAI will receive 4% less amount in the next year. This is because only six of these stretches have received a higher bid offer than the last year. They include four stretches in Uttar Pradesh and one in Andhra Pradesh.
Process of bidding:
During the bidding process, a fixed amount of money is quoted by the bidder firm to the NHAI. This will enable them to bag the toll collection rights from road users along a particular National Highway (NH) stretch, for a period of one year. The bidder quoting the highest amount to the NHAI would win the contract. Explaining the variation in bid amounts received, an NHAI official stated that the lower bids received in some areas were due to local issues like the resistance to pay tolls.
Toll charges to be increased:
Considering that there was no response to three bids, the existing contracts for these stretches will be extended by another three months. There is a general drop in traffic across most highway projects, with toll charges being levied from users being the same. However, toll charges will be increased from April 1st, 2014, which will be proportionate with the 60%` of the WPI inflation and 3% simple interest rate.
NHAI conducting entire bidding process for the first time:
Incidentally, this is the first time that NHAI is conducting the entire bidding process for obtaining the rights for toll collections from road users for public funded projects. The process is long-drawn starting with the annual qualifying bids list to the financial bid submission. This process of bidding was earlier followed for awarding highway projects as well as for operating maintenance transfer contracts.
