Eligibility criteria to develop highway projects simplified by Centre

05 Apr 2023 CW Team

Highways are vital infrastructure, thus the centre wants to make sure that only businesses with a track record of large-scale project completion are permitted to submit bids. This precaution is taken in order to prevent projects from being hampered by fly-by-night contractors who lack the necessary skills to complete them and who may submit unrealistic bids. Bidders must be able to meet the technical and financial requirements of the eligibility criteria. The bidder must have a minimum net worth requirement and have experience working on projects in the associated core and highways sectors. Also, businesses must guarantee that they have executed at least one similar project worth 20% of the total project cost.

It has been determined that the core sector for HAM mode, where the centre bears a portion of the cost, will include projects with the names Rural Infrastructure Development Fund (RIDF), Pradhan Mantri Gram Sadak Yojana (PMGSY) roads, link roads, city roads, rural roads, sector or municipality roads, real estate projects that demonstrate road development, and building of bridges or culverts, among others. Also, it has been decided that maintenance projects would not be evaluated under the HAM project eligibility requirements.

New requirements have been added for standalone specialised projects under BOT, which calls for a greater outlay of cash by the private concessionaire. The bidder must have finished at least one major Bridge, Road Over Bridge (RoB), or Flyover project in the ten financial years prior to the bid due date if the cost of a specialised project is more than Rs 10 billion. Also, it has been established that the finished bridge must have a span that is at least 50% longer than the longest span of the project's proposed structure.

Businesses that have built linear infrastructure including airport runways, railway tracks, container yards, metro rail and ports are eligible to compete on capital-intensive highway projects. This was made feasible after the centre loosened the requirements for eligibility that bidders for highway projects under the public private partnership (PPP) mode. However, the decision from the Ministry of Road Transport and Highways also stated that in order to build motorways under the Build, Operate, Transfer (BOT), and Hybrid Annuity Model (HAM) modes, bidders must have a credit rating of BBB and above. This new need has been added to the PPP project eligibility requirements. Highways are vital infrastructure, thus the centre wants to make sure that only businesses with a track record of large-scale project completion are permitted to submit bids. This precaution is taken in order to prevent projects from being hampered by fly-by-night contractors who lack the necessary skills to complete them and who may submit unrealistic bids. Bidders must be able to meet the technical and financial requirements of the eligibility criteria. The bidder must have a minimum net worth requirement and have experience working on projects in the associated core and highways sectors. Also, businesses must guarantee that they have executed at least one similar project worth 20% of the total project cost. It has been determined that the core sector for HAM mode, where the centre bears a portion of the cost, will include projects with the names Rural Infrastructure Development Fund (RIDF), Pradhan Mantri Gram Sadak Yojana (PMGSY) roads, link roads, city roads, rural roads, sector or municipality roads, real estate projects that demonstrate road development, and building of bridges or culverts, among others. Also, it has been decided that maintenance projects would not be evaluated under the HAM project eligibility requirements. New requirements have been added for standalone specialised projects under BOT, which calls for a greater outlay of cash by the private concessionaire. The bidder must have finished at least one major Bridge, Road Over Bridge (RoB), or Flyover project in the ten financial years prior to the bid due date if the cost of a specialised project is more than Rs 10 billion. Also, it has been established that the finished bridge must have a span that is at least 50% longer than the longest span of the project's proposed structure.