The National Highways Authority of India (NHAI) is set to award road projects of over 1,600 km under the Engineering, Procurement and Contract (EPC) route in the next few months, an indication that momentum is picking up in the sector that has been under pressure in recent times.This is part of the 2,500 km of projects earmarked by the authority for awards this year.

“We have already received bids for five projects covering 502 km and the response is good. The number of bids these projects have received range from as low as 4 to 12. We are satisfied with the response under the EPC,” said a senior NHAI official.

In addition, the NHAI has also called bids for another 225 km and are preparing bids for projects covering 800 km.

The official added that these projects will act as a booster for the slowdown-hit infrastructure companies, who are not showing interest in projects under public-private partnership (PPP).

NHAI had to shift its focus from awarding under EPC after projects offered under PPP mode failed to attract takers. The authority did not find any takers for 20 “viable” projects put up for bids during the current fiscal.

Projects under EPC are virtually risk-free for the contractor, as the government funds the construction. Under this mechanism, the contractor has to quote the cost of constructing or upgrading the road section, and if the bid is accepted, the government funds the project.

The official added that the authority has enough cash to fund these projects under EPC during the current fiscal.

“Money is not an issue during the current fiscal, as these projects would require only 15 per cent of the total project cost during the year. Also, we do not have to acquire a large amount of land because these projects are to be built on the existing alignment and land required will already be in place,” said the official.

With the award of 2,500 km under EPC, NHAI would be able to able to improve its award tally for the current fiscal.

The authority managed to award only 800 km of projects in 2012-13.

During the current fiscal, NHAI has awarded projects covering 859 km so far – a substantial portion under EPC. The road transport ministry has awarded projects covering 463 km.

EPC BOOSTER

BIDS RECEIVED for 5 projects covering 502 km

THE average number of bids received range from 4 to 12

BIDS are being called for projects covering 225 km, and preparations are underway for an additional 800 km

The award target for projects under EPC is 2,500 km

859 km of road projects have been awarded in this fiscal

Source-http://www.indianexpress.com