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Centre relaxes eligibility criteria for developing highway projects, ET Infra


Companies that have developed linear projects like airport runways, railways tracks, yards for keeping containers, metro rail, and ports can participate in bidding for capital intensive highways as well. This became possible after the centre relaxed the eligibility criteria which bidders need to meet for developing highway projects under the public private partnership (PPP) mode.

But the order from the Ministry of Road Transport and Highways also said that bidders need to have a credit rating of BBB and above to build highways under Build, Operate, Transfer (BOT), and Hybrid Annuity Model (HAM) modes. This is a new provision added in the eligibility criteria for PPP projects.

Due to the critical nature of highways, the centre wants to ensure that only companies that have executed tasks of scale are allowed to participate in bids. This measure is also taken to keep a check on fly-by-night operators that do not have the expertise to execute projects and may bid unrealistically, hampering the outcome.

The eligibility criteria requires bidders to have financial and technical capacity. This mandates the bidder to have a minimum net worth and have worked on a project in the related core and highways sectors. Companies also need to ensure that they have completed at least one similar work of 20% of the estimated project cost.

For HAM mode, where the centre foots a portion of the cost, it has been decided that core sector would include projects with the title of Rural Infrastructure Development Fund (RIDF), Pradhan Mantri Gram Sadak Yojana (PMGSY) road, link road, city roads, rural road, sector or municipality road, real estate projects which demonstrate road development, and construction of bridges or culverts among others.

It has also been decided that maintenance works are not to be considered for evaluation under the eligibility criteria for HAM projects.

Under BOT, which requires more capital deployment by the private concessionaire, new criteria have been inserted for stand-alone specialised projects. As per the new norms, if the cost of a specialized project is more than Rs 1,000 crore, the bidder shall have completed at least one similar major Bridge, Road Over Bridge (RoB), or Flyover project in the last 10 financial years preceding the bid due date.

It has also been decided that the completed bridge needs to have a span equal to or greater than 50% of the longest span of the proposed structure in the project.

New PPP Highway rules

-BBB Minimum rating of contractors

-Companies with experience in other sectors can also bid

-Focus on inviting large contractors

Focus on HAM and BOT

-Strict qualification for specialised projects

-Eligibility criteria widened

  • Published On Apr 4, 2023 at 11:31 AM IST

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