New Delhi: The country’s highway regulator has prevented two shortlisted companies—GMR Group and Madhucon Projects Ltd—from bidding for a highway stretch in Andhra Pradesh and replaced them with two others after a re-evaluation of bids, setting the stage for a potential court battle.
The National Highways Authority of India (NHAI) wrote to GMR and Madhucon on Wednesday, informing them that they were no longer eligible to bid for the 176km stretch of NH9 between Hyderabad and Vijayawada, according to two people familiar with the matter, who did not want to be named.
The two added that NHAI didn’t give the companies any reason for dropping them from the list.
According to the same two people, the new entrants in the shortlist are Soma Enterprise Ltd, which will bid in consortium with Isolux Corsan Group, and Shapoorji Pallonji and Co. Ltd (SPCL), which has signed a pact with Spain’s Cintra Concesiones De Infraestructuras De Transporte SA, to bid for highway projects.
Going nowhere: The Greater Noida highway. The NH9 project, which NHAI is carrying out at an estimated cost of about Rs1,141 crore, faces delay due to the controversy over shortlisting of bidders. Photograph: Ramesh Pathania / Mint
A GMR spokesperson refused to comment on the issue and an official with Madhucon Projects said the company was evaluating its options. Two people, an NHAI official and an expert, said that the issue could well be played out in courts.
“Some people have threatened litigation, (and) there is nothing we can do about that. It is a free country,” said an NHAI official, who didn’t wish to be named.
“The whole issue needs to be clarified before infrastructure development can happen,” said Amrit Pandurangi, who heads the transport and infrastructure practice for audit and consulting firm Pricewaterhouse Coopers.
Mint had reported on 4 August that the project faced delays after a two-member committee was appointed in July to look into the objections raised by companies that couldn’t make it to the list, including Soma Enterprise.
The committee subsequently gave all bidders one week to provide clarifications on their initial bids, after which the bids were re-evaluated.
Six entities were originally selected to bid for the highway project, estimated to cost at least Rs1,141 crore: GMR, GVK Industries Ltd, Hindustan Construction Co. Ltd, Larsen and Toubro Ltd, Madhucon, and a consortium of Maytas Infra Ltd and Nagarjuna Construction Co. Ltd.
Soma and SPCL’s initial bids were not taken into account earlier because the relationship between the companies and their project operating units were not certified by their statutory auditors.
The firms are now being allowed to bid because they showed that the chartered accountants certifying the relationships in both cases were indeed the statutory auditors, the NHAI official said.
“Based on the committee’s report, they (NHAI) invited further clarifications, which has no meaning,” said S.V. Patwardhan, an executive director with Madhucon Projects. “We are deliberating our options. There is no point going back to them, because they have made the decision after seeking clarifications.”
“They (NHAI) sent a two-line message to the two companies saying you are not eligible to bid without giving any reason,” said an official at a large infrastructure company, who asked that neither he, nor his company be named, citing ongoing government contracts.
Meanwhile, Ankineedu Maganti, a director with Soma Enterprise, said he had expected the list to be expanded to include more companies. NHAI, however, must have been constrained by the fact that it would go against the bid guidelines created by the finance ministry, which cap the number of firms that can be shortlisted at six, he added.
Soma was one of at least two companies that made representations to the ministry after it was not named in the original shortlist.
“You would expect them (GMR and Madhucon) to feel disappointed like we felt when we were not part of the original list,” Maganti added.