Under a new rule, introduced by the National Highways Authority of India (NHAI), companies that have failed to complete financial closure of three or more projects would be barred from bidding for new projects. Highway projects achieve financial closure in six months in the normal course.
According to a senior NHAI official, with the introduction of the clause, it was hoped bidders who were overburdened would get breathing space in terms of arranging finances. The move would also help sideline non-serious bidders he added.
The move would also send a message to bidders that the government would not keep awarding projects because they were quoting the lowest bids, he said. He added that with the scale of operations the government was planning to take up in the highway construction business, it needed to be doubly sure about delivery from private sector participants.
Meanwhile, the move would impact infrastructure majors who have been aggressively competing for NHAI projects.
Hindustan Construction Company (HCC), by December last year had tied up funds for three highway projects which included the Rs1000 crore Dhule project on the Madhya Pradesh-Maharashtra border.
HCC last week bagged three additional projects worth Rs2,860 crore in West Bengal. This has rendered it ineligible for participation in bidding for future projects even in consortium partnership with other bidders, till it achieved financial closure for the projects.