India News | Analyse Shortcomings of Awarding Road Projects to Lowest Bidder: Par Panel to Road Ministry

New Delhi, Jul 28 (PTI) A Parliamentary panel has recommended to the road transport and highways ministry to analyse the shortcomings of the existing mechanism of awarding road projects to the lowest bidder, saying there should be consideration for other factors besides the bidding amount.

The report of the department-related Parliamentary Standing Committee on Transport, Tourism and Culture on 'Role of Highways in Nation Building' noted that a qualitative approach must be formulated for awarding road projects.

"The Committee further recommends the ministry to carefully analyze the shortcomings of the existing mechanism for awarding road projects to the lowest bidder, since doing so includes little thought for ensuring quality of the work," the report said.

The committee said the ministry may take up with the Central Vigilance Commission (CVC) the shortcomings of the existing system, presenting its arguments for modification of the CVC guidelines for awarding of tender in a suitable way to permit an element of qualitative approach in the awarding process for road projects.

"The committee believes that there should be consideration for other importance factors besides the bidding amount, while awarding a project to a concessionaire," according to the report.

The committee suggested that a criteria may be developed where certain weightage is given to objective parameters such as the awards presently being executed by the contractor, their financial record, and most importantly, the past performance of a contractor in terms of quality of work and timely execution.

The ministry may consider breaking down big road projects into smaller chunks so as to attract the interest of the small contractors, it added.

It noted that provisions should be in place to ensure that there is a well-defined lower limit, below which bids for a road project would not be accepted.

Further, the committee suggested that NHAI may consider lowering the minimum investment amount in the InvIT IPO to a suitable amount so as to attract more participation.

Noting that India's foreign exchange reserves have risen substantially in the recent past, the committee suggested that the RBI, with due consideration to the sufficiency of the foreign reserves, may consider the possibility of utilisation of surplus funds to finance long-term road infrastructure projects. "RBI may also look into the feasibility of utilization of the surplus reserves for the creation of a sovereign wealth fund to finance long-term infrastructural assets," it said.

According to the committee, the ministry may review the Model Concessionaire Agreements (MCAs) for different modes of implementation of road projects from time to time, with inputs from both the concessionaires as well as the lenders.

Observing that the ministry must undertake a holistic review of the Detailed Project Report (DPR) preparation stage of road projects, it said, "Preparation of DPR should be aided by the latest technology available for the purpose and the inputs of the stakeholders and public representatives, including the local M.P., and the demands and concerns of the local populace should be taken into account during the process of preparation of the DPR."

The committee also said the ministry may come up with rules/ necessary statutory provisions to fix the accountability of the officials/ organisation responsible.

It recommended that DPRs of national highway projects should have provisions for right of way and service roads.

Observing that the funds allocated for the maintenance of National Highways every year is minuscule, the committee emphasised that the maintenance of the existing network should be given topmost priority and the same should be reflected in the budgetary allocation.

It also said the ministry should look into the reasons for the large number of vacancies in NHAI.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)