Govt plans 5-fold increase in DPR contract threshold
ROADS & HIGHWAYS

Govt plans 5-fold increase in DPR contract threshold

A senior government official has revealed plans to establish a threshold of Rs 5 lakh per km for the allocation of detailed project report (DPR) contracts to road consultants. This marks a significant increase from the current average of Rs 1 lakh per km, signalling a shift from a least-cost to a fixed-cost model. The move aims to enhance the quality of DPRs to align them with international standards and mitigate project delays, according to an anonymous official cited by ET.

The Ministry of Road Transport and Highways has initiated consultations with stakeholders to gather feedback on the proposed changes and intends to formulate new rules for DPRs in the near future.

The official emphasised the necessity for a minimum base price to prevent the awarding of contracts to bidders quoting excessively low prices, only to deliver subpar DPRs, resulting in project delays and cost overruns. The proposed base price considers global norms regarding salaries for high-quality human resources and other relevant factors. While a final decision is pending, the government anticipates that implementing a threshold will attract better quality DPRs.

The government asserts that project execution delays stem from deficiencies and poor quality in the project preparation stage, leading to modifications in the scope of work, variations, and time and cost overruns. Despite the potential fivefold increase in DPR costs, the government believes that the benefits derived from improved DPR quality and resulting savings will outweigh the additional financial burden on the exchequer.

A senior government official has revealed plans to establish a threshold of Rs 5 lakh per km for the allocation of detailed project report (DPR) contracts to road consultants. This marks a significant increase from the current average of Rs 1 lakh per km, signalling a shift from a least-cost to a fixed-cost model. The move aims to enhance the quality of DPRs to align them with international standards and mitigate project delays, according to an anonymous official cited by ET. The Ministry of Road Transport and Highways has initiated consultations with stakeholders to gather feedback on the proposed changes and intends to formulate new rules for DPRs in the near future. The official emphasised the necessity for a minimum base price to prevent the awarding of contracts to bidders quoting excessively low prices, only to deliver subpar DPRs, resulting in project delays and cost overruns. The proposed base price considers global norms regarding salaries for high-quality human resources and other relevant factors. While a final decision is pending, the government anticipates that implementing a threshold will attract better quality DPRs. The government asserts that project execution delays stem from deficiencies and poor quality in the project preparation stage, leading to modifications in the scope of work, variations, and time and cost overruns. Despite the potential fivefold increase in DPR costs, the government believes that the benefits derived from improved DPR quality and resulting savings will outweigh the additional financial burden on the exchequer.

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?