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Road Sector Update

I was reading through an interview of JN Singh, Member Finance of National Highway Authority of India (NHAI). Following are the highlights:

  • NHAI has set a target to award 7,300 km of roads during the financial year 2011-12
  • This is 44% higher than 5,083 kms awarded in FY 2011
  • About 75% of the work is expected to be awarded on Build Operate & Transfer (BOT) basis
  • A ballpark figure of Rs9.5 per km for 4-laning and Rs3.5 crore for developing 2-lane roads is taken into consideration

RFQ – Request For Qualification

NHAI has eliminated the requirement for filling RFQ each time a bidder bids for road construction projects.

NHAI has introduced an annual qualification system whereby the companies/bidders can fill their annual RFQ before 25 April each year. They need not fill the RFQ each time they bid for a project during the year the annual RFQ is filled. This will result in reduced paperwork and improve the process of selection and award of projects.

A brief on the Qualification Criteria for bidders of road construction projects:

  • For project cost less than Rs 2,000 crore — Financial networth of Minimum 25% of the project cost is required
  • For project cost between Rs 2,000 -3,000 crore — Financial networth of Minimum 50% of the incremental project cost over Rs 2,000 crore is required
  • For project cost more than Rs 3,000 crore — Financial networth of Minimum 100% for every incremental cost over Rs 3,000 crore is required

Thus, naturally larger projects will attract bigger companies.

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Categories: Roads
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