Of the orders being offered as EPC contracts by the National Highways Authority of India, 6-8 were to be bid out as BOT projects earlier but the government decided to award them as cash projects in view of the unwillingness of the developers to take up these projects.
The contractors that had pushed into project development are now looking at beefing up their EPC orders book. Most infrastructure companies have highly use borrowed capital balance sheets and do not have interest to take on any more projects under the BOT model as they don't want to increase the debt obligation.
These cash contracts assurance a shot in the arm for infrastructure companies, most of which have underutilised or idle labour and equipment. Large EPC projects are coming up for bidding in January-March and they hope to bag some of them. But there will be some aggression in bidding for these projects because people have not got large jobs in two years and they want these to utilise capacity.
Offering much-needed relief to infrastructure companies that have been struggling with reduce order books and silent cash flows among the lull in government contracts for almost 3 years. The government is likely to award projects totalling 8000 km primarily as EPC contracts.