The Centre, which is working to spur economic activities, has tweaked the eligibility criteria for developers to build highways.
The Union Road Transport and Highway Ministry made changes in bidding documents to relax financial and technical criteria for HAM (hybrid annuity model) and BOT (build, operate, transfer) for road projects. The relaxation in criteria has also been made for construction of tunnels and bridges.
The main aim to bring changes is to encourage more local contractors’ participation in the highway building work as the Ministry of Road Transport is planning to award more projects in coming days to improve infrastrecture development, said an official in the Ministry.
With the relaxations, the companies who have executed irrigation, water supply, stadiums, hospitals, hotels, smart cities, warehouses, oil and gas projects besides real estate, can also bid for highway projects.
Since several highway projects facing delay due to Covid-19 pandemic, the government has been planning to bring more companies’ participation in the development of infrastructure and expedite works, the official said.
According to the new norms, any contractor without prior experience can apply to build a tunnel measuring up to 200 metres while for bridges, prior experience is not required for building up to 60-metre structures.
The move holds significance as there are about 730 developers for EPC (engineering procurement and construction) projects of which only 21 are capable of executing projects worth over Rs 2,000 crore as per the qualification criteria earlier.
Based on the criteria, 72 developers can handle projects in the range of Rs 1,000 crore to Rs 2,000 crore, while 75 contractors are such who can handle projects in the range of Rs 500 crore to Rs 1,000 crore.
Majority of the developers fall under the category of contractors who can handle projects in the range of Rs 100 crore to Rs 500 crore.
The Ministry also proposed to change the existing norm requiring average annual turnover of 20 per cent of estimated project cost (EPC) to 15 per cent of EPC.