+
Govt opens up highway projects for mid-sized firms
ROADS & HIGHWAYS

Govt opens up highway projects for mid-sized firms

The recent relaxations by the government by increasing participation from a larger set of bidders are likely to intensify competition in highways, roads, bridges and tunnelling projects, as they enable mid-sized firms to participate in the bidding process. As the eligibility of multiple construction contractors has been hindered by the global pandemic, these relaxations will provide the much-needed relief.

As a part of the relaxations provided, the government has slashed the minimum net worth criteria limit to 15% from 25% of the projected engineering, procurement, construction (EPC) project value in the preceding financial year for bidders of national highway projects. The definition of core sector has been expanded to include the construction of hotels, warehouses, stadiums, oil and gas, hospitals, smart cities, silos, and commercial set-up works.

Some of the measures for mid-sized construction companies include relaxation of technical eligibility criteria for tunnelling, bridge works; extension of concessions for all road projects; and relaxation of eligibility criteria for road EPC projects.

The reform may also help with bank credit, which has been shrinking for the sector since even before the onset of the pandemic. After the coronavirus pandemic severely affected the liquidity of infrastructure developers, the government has decreased the amount of performance guarantee for all construction contracts to 3% of the value of the respective contracts, from the extant levels of 5-10%. This reduction is valid for all existing contracts and will continue to remain so for all contracts awarded until the end of next year. It has been implemented to ease liquidity concerns and ensure timely execution of projects.

The recent relaxations by the government by increasing participation from a larger set of bidders are likely to intensify competition in highways, roads, bridges and tunnelling projects, as they enable mid-sized firms to participate in the bidding process. As the eligibility of multiple construction contractors has been hindered by the global pandemic, these relaxations will provide the much-needed relief. As a part of the relaxations provided, the government has slashed the minimum net worth criteria limit to 15% from 25% of the projected engineering, procurement, construction (EPC) project value in the preceding financial year for bidders of national highway projects. The definition of core sector has been expanded to include the construction of hotels, warehouses, stadiums, oil and gas, hospitals, smart cities, silos, and commercial set-up works. Some of the measures for mid-sized construction companies include relaxation of technical eligibility criteria for tunnelling, bridge works; extension of concessions for all road projects; and relaxation of eligibility criteria for road EPC projects. The reform may also help with bank credit, which has been shrinking for the sector since even before the onset of the pandemic. After the coronavirus pandemic severely affected the liquidity of infrastructure developers, the government has decreased the amount of performance guarantee for all construction contracts to 3% of the value of the respective contracts, from the extant levels of 5-10%. This reduction is valid for all existing contracts and will continue to remain so for all contracts awarded until the end of next year. It has been implemented to ease liquidity concerns and ensure timely execution of projects.

Related Stories

Gold Stories

Next Story
Infrastructure Transport

97 Per Cent Of Rongjeng-Mangsang-Adokgre Road Nears Completion

Deputy Chief Minister in-charge of public works Prestone Tynsong said in Shillong on 26 August that 97 per cent physical progress had been achieved on the ongoing Rongjeng-Mangsang-Adokgre road being constructed under the Non-Lapsable Central Pool of Resources (NLCPR). He noted the project was sanctioned in 2017 and that the stipulated time for completion had been 24 months from issue of the final work order. The deputy chief minister informed the assembly that the government had decided to include the remaining work under a World Bank project. In reply to a query from Rongjeng MLA Jim M Sangm..

Next Story
Infrastructure Transport

First TBM Starts Digging Five Point Three Kilometre Tunnel Under SGNP

The Goregaon-Mulund Link Road (GMLR) Phase three (B) project has reached a key milestone as the first tunnel boring machine (TBM) began excavation of the first of two tunnels beneath the Sanjay Gandhi National Park (SGNP). The machine, named Tulsi, started cutting a five point three kilometre bore that will link Dadasaheb Phalke Chitranagari in Goregaon East with Amar Nagar in Mulund West. Officials issued a statement noting the commencement of tunnelling work under the protected green belt. The twin tunnels are being constructed using mechanised tunnelling methods that aim to limit surface di..

Next Story
Infrastructure Transport

UP Approves Two Expressways And Rs 240 bn Infrastructure Push

The Uttar Pradesh Cabinet approved a series of infrastructure and industrial investment proposals totalling Rs 240 billion (Rs 240 bn), including two major expressway projects, a manufacturing and logistics cluster in Sultanpur and incentives for 11 industrial projects across the state. The decisions, taken at a meeting chaired by Chief Minister Yogi Adityanath, underline the state government’s focus on expanding road connectivity around emerging industrial hubs while attracting manufacturing investment to districts beyond major urban centres. The approvals cover both greenfield expressway c..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code