New Delhi: Macquarie Capital, the local unit of Sydney-based Macquarie Group Ltd, has run into trouble with highways regulator National Highways Authority of India (NHAI), after the latter asked the investment group to provide conclusive documentation on its control over firms it has shown as associates for all future projects.
NHAI has refused to take into account the net worth and the technical expertise of these companies at the request for qualification (RFQ) stage.
According to at least two NHAI officials, this has hurt Macquarie’s chances in at least a dozen highway projects in which it has shown interest.
Question time: Construction work on NH-58. Macquarie Capital is partnering Gammon Infrastructure to bid for more than 20 highway projects. Rajeev Dabral / Mint
According to one NHAI official who didn’t want to be named, the documentation provided by Macquarie Capital for participation in highway projects was found to be inconclusive.
It has therefore been asked to share more details on the companies under its control while bidding for projects in the future, he said.
“The link between Macquarie Capital and these associates is not clear and therefore their experience cannot be factored in,” said this officer.
A clause in RFQ document says that while computing the technical capacity and net worth of the applicant or consortium members, the respective net worth of associates would also be taken into account.
Meanwhile, NHAI officials also say that Macquarie cannot submit additional papers once they have submitted them at the RFQ stage. “They cannot provide additional documentation once the papers have been submitted as part of the bidding process,” said this official.
A senior executive with Macquarie Capital, who spoke to Mint requesting anonymity, would only say that discussions on the matter with NHAI were “under process”.
Infrastructure expert with audit firm KPMG Arvind Mahajan said several international firms are facing similar problems in the domestic infrastructure space. “The problem in India is that the authorities overlook the objective behind the exercise of assessing these companies and instead focus on lesser aspects,” said Mahajan.
Macquarie Capital is partnering Gammon Infrastructure Projects Ltd, or GIPL, to bid for more than 20 highway projects across the country.
A GIPL executive said the issue is being sorted out by its partner. “This is only a temporary problem and we are sure of moving all our projects soon,” said this executive, asking not to be named.
Another official with NHAI said: “They (Macquarie-Gammon venture) could not be shortlisted for several projects because they were beaten on points by other companies.”