Govt plans Rs 5 Lakh/km Threshold for road project contracts
ROADS & HIGHWAYS

Govt plans Rs 5 Lakh/km Threshold for road project contracts

The government plans to establish an Rs 5 lakh per kilometre threshold for awarding contracts for the preparation of Detailed Project Reports (DPRs) for road projects. This marks a significant increase from the current average of Rs 1 lakh per kilometre and signifies a shift from the least-cost to a fixed-cost model, according to reports from the Economic Times.

Presently, bidders often quote the minimum price to secure contracts, leading to the production of low-quality DPRs. This, in turn, results in modifications to the scope of work, variations, time delays, and cost overruns, ultimately causing project delays. To address this issue, the government is proposing a minimum price threshold for contract awards to enhance the quality of DPRs, aligning them with international standards and aiming to prevent delays in projects.

Road Transport Minister Nitin Gadkari has expressed concerns about the substandard DPRs prepared by Indian companies, linking them to project delays and road accidents. The Ministry of Road Transport and Highways (MoRTH) is currently seeking feedback from stakeholders on these proposed changes and is expected to finalise new rules for DPRs soon.

The suggested minimum price is based on global norms related to the salaries of skilled personnel and other relevant factors. Although a final decision is pending, the government believes that setting a threshold will encourage the submission of high-quality DPRs.

Acknowledging that a fivefold increase in DPR costs may pose an additional financial burden, the government remains optimistic that the long-term benefits derived from improved DPR quality and resulting savings will outweigh these initial costs.

The government plans to establish an Rs 5 lakh per kilometre threshold for awarding contracts for the preparation of Detailed Project Reports (DPRs) for road projects. This marks a significant increase from the current average of Rs 1 lakh per kilometre and signifies a shift from the least-cost to a fixed-cost model, according to reports from the Economic Times. Presently, bidders often quote the minimum price to secure contracts, leading to the production of low-quality DPRs. This, in turn, results in modifications to the scope of work, variations, time delays, and cost overruns, ultimately causing project delays. To address this issue, the government is proposing a minimum price threshold for contract awards to enhance the quality of DPRs, aligning them with international standards and aiming to prevent delays in projects. Road Transport Minister Nitin Gadkari has expressed concerns about the substandard DPRs prepared by Indian companies, linking them to project delays and road accidents. The Ministry of Road Transport and Highways (MoRTH) is currently seeking feedback from stakeholders on these proposed changes and is expected to finalise new rules for DPRs soon. The suggested minimum price is based on global norms related to the salaries of skilled personnel and other relevant factors. Although a final decision is pending, the government believes that setting a threshold will encourage the submission of high-quality DPRs. Acknowledging that a fivefold increase in DPR costs may pose an additional financial burden, the government remains optimistic that the long-term benefits derived from improved DPR quality and resulting savings will outweigh these initial costs.

Next Story
Infrastructure Transport

NHAI to Build 6-Lane Agra-Gwalior Expressway on BOT (Toll) Mode

To enhance connectivity between the tourism hubs of Agra and Gwalior, National Highways Authority of India (NHAI) will develop 88 km long 6-lane access controlled Agra-Gwalior Greenfield Expressway (NH-719D). NHAI, today signed a concession agreement for the implementation of project with GR Infraprojects, in presence of NHAI Chairman, Santosh Kumar Yadav and senior officials of NHAI and the Concessionaire. The Agra-Gwalior Greenfield Expressway will start from Deori village in Agra and terminate at Susera village in Gwalior. The project shall be developed at a Total Capital Cost of Rs 46.13 b..

Next Story
Infrastructure Transport

Cabinet Nods 166.8-km NH-6 Greenfield Corridor on HAM Mode

The Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi has approved the proposal for Development, Maintenance and Management of 4-lane Greenfield Access Controlled 166.80 km of National Highway No. 06 from Mawlyngkhung (near Shillong) in Meghalaya to Panchgram (near Silchar) in Assam on Hybrid Annuity Mode as an access controlled greenfield High-Speed Corridor at a total capital cost of Rs 228.64 billion. The project length of 166.80 km lies in Meghalaya (144.80 km) and Assam (22.00 km). The proposed Greenfield high-speed corridor will improve the service level ..

Next Story
Infrastructure Urban

Commercial Ops Begin at Multi-Modal Logistics Park in Nagpur

Under the PM Gati Shakti initiative of Prime Minister with the aim to provide seamless and efficient connectivity for the movement of people, goods and services across various modes of transport, thereby enhancing last-mile connectivity and reducing travel time, and under the guidance of Union Minister of Road Transport and Highways, Nitin Gadkari, the Multi Modal Logistics Park, Nagpur (MMLP Nagpur) at Sindi, near Wardha commenced its commercial operations with a goal to establish a faster link. The MMLP Nagpur established by National Highway Logistics Management (NHLML), a 100 per cent own..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?