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• Bidding rules are being changed so that highway projects may be awarded in constituencies of select politicians before the model code of conduct comes into force for the Uttar Pradesh assembly elections next year.The projects in question are a 165km Tanda-Rae Bareilly highway requiring a Rs500 crore investment, and the 140km Rae Bareilly-Banda stretch, requiring Rs350 crore. In order to ensure quick awarding of these two projects, the ministry of road transport and highways took them up on an “engineering procurement contract” basis. With this, the projects became entitled for funding through central government funds. It does not require any private funds as in the case of Public-Private-Partnerships projects (PPP), an arrangement that takes time to fructify.This means the entire Rs850 crore required for the proposed highway will come from taxpayers. Of course, the electoral benefit should last till the 2014 Parliamentary elections.
• On being asked about the reasons for using fiscal resources for funding highway projects connecting Rae Bareilly, union transport secretary AK Upadhyay told DNA that they “are doing this on a pilot basis. It is a new initiative that we are trying.” Upadhyay did not elaborate on why private sector funds were notused for the projects. Incidentally, since May 2009, the Central government has awarded only nine highway projects in UP.Another amendment that has been inserted in the existing criteria by the surface transport ministry is to limit competition by raising the eligibility criteria for the companies bidding for them.Industry sources told DNA on the condition of anonymity that this has been done to ensure that only big infrastructure companies make the cut, and to ensure the “deliverability of the project.”As a result, the Tanda-Rae Bareilly project has received bids from only seven companies. In the case of the Rae Bareilly-Banda highway, ten companies were shortlisted.Compared with other projects where bidding did take place as per the earlier guidelines, the number of short-listed bidders was anything between 15 and 50 companies. “It is clear that there will be more competitive bids when there are more bidders. That works in favour of the government,” an industry source said.
• National Highways Development Federation (NHBF), a representative body of highway developers in the country, has even raised their concerns over clauses limiting competition in bidding for the projects. In a letter written to surface transport minister, CP Joshi (a major Congress leader from Rajasthan) in September this year, the NHBF sought withdrawal of such clauses. When its petitions evoked no response from the ministry, the body approached the Competition Commission of India (CCI). The CCI responded by saying that its observations can only be recommendatory in nature. In a written reply to the NHBF, however, the CCI asked the highway body to file a petition in the prescribed format.

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