The recent trend of highway contractors quoting 20-25% less than the bid price in many projects has become a new concern for government agencies and there is a fear whether players quoting such low price would complete works. The issue even came up at the parliamentary standing committee meeting last week where the members asked the highway ministry and NHAI to find if anything is going wrong.
Sources said some of the MPs in the panel had flagged whether the government estimates for projects were inflated or fly-by-night players were flooding the bidding process. Officials said in some cases more than two dozen players are bidding for each project and that’s unusual.
“One reason is that the government has relaxed the bidding norms to increase the basket of eligible bidders and even the provision of additional bank guarantee or performance security for those quoting abnormally low prices for works has been done away with. Another reason for more bids could also be because there is less work in other sectors,” said an official.
The relaxation for performance security was made under the Atmanirbhar Bharat scheme of the government in November last year. “Now it’s emerging as a concern. But the decision has to be taken by the finance ministry,” said another official.
However, NHAI chairman S S Sandhu said after awarding projects NHAI will not compromise on quality and pace of project delivery. “We have made the monthly video recording of work using drones mandatory for all new contracts and that will be a game changer. Neither can the contractor nor our own officials influence the ground reality. Everyone in the chain will be held accountable for their acts and performance,” Sandhu told TOI.
He added the highways authority has also undertaken strict monitoring of quality works. “We have taken action against highway builders and consultants where they have been found responsible for poor quality work. Every entity concerned about its reputation will do a good job,” Sandhu said.
The NHAI has started deputing independent teams from its headquarters to carry out frequent quality checks of works at sites for projects which private players have bagged, quoting “abnormally low bids”. It has put in place a system for random quality checks, once in every 2-3 months, during the construction period.
News source- Economic Times