National Highways Authority of India (NHAI) offered
five of the six road projects awarded in April 2013, covering a total length of 339 km, under the engineering procurement construction or (EPC) mode.
The authority awarded the remaining one project on the BOT-toll (build operate transfer) model, the predominant format under which projects were being offered to developers over the last few years.
It is learnt that NHAI received aggressive bids that quote as much as 45 per cent lower than its benchmark cost for these five EPC projects.
Some industry observers feel that this indicates the recovery of private sector interest in road sector after a lull of around a year.
In an EPC project, the contractor has to quote the cost of constructing or upgrading the road section, which is completely funded by the government. Every project has an estimated project cost and the developer offering to complete the project at the lowest cost gets it.
Some analysts feel that EPC projects could generate interest, as they involve less risks but fear that completion of these projects could also face difficulties due to mining ban in states.
In 2012-13, the award of road projects slowed down and awards by NHAI reached a new low. During the preceding financial year, NHAI could award projects covering only 800 km. Even as the slowdown in the economy was blamed for the reason for the fall in awards, the dismal show was preceded by a high-performance year.
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