New Delhi: The ministry of road transport plans to ask contractors who have delayed work in the national highway development programme, or NHDP, to sign a supplementary agreement under which they will have to complete the project within a time frame, two officials and a company representative said.
Contractors who fail to complete work in the specified time would risk being classified as non-performers, which will affect their ability to win new projects. The existing contracts will then be cancelled and re-tendered.
The supplementary agreement will apply only to the so-called engineering, procurement and construction, or EPC, contracts in phase II of NHDP, said an official at the National Highway Authority of India, or NHAI, who didn’t want to be identified. NHAI oversees the country’s highway building efforts.
In EPC contracts, a contractor builds the road for a specific fee and then transfers it to the highway authority.
Phase II of NHDP was originally approved by the cabinet committee on economic affairs in December 2003. It comprises 6,161km of roads under the north-south-east-west, or NSEW, corridor and 486km of other highways.
According to the NHAI official, so far, the highway authority has awarded 118 EPC contracts for phase II of NHDP. Mint could not immediately ascertain how many of these are delayed or how many contractors could be affected by the proposed move.
The government has used supplementary agreements for some stretches of the World Bank-funded highways after the institution complained of huge delays in the programme. At least two contractors were subsequently classified by NHAI as non-performers.
The highway authority has been in the news following delays in several phases of NHDP. As reported by Mint, NHAI could not complete any of the 47 projects in the second phase of the NSEW corridor.
The projects were also delayed after a highway developers’ body challenged in Supreme Court in January 2008 the government’s decision to shortlist bidders based on prior experience to put in financial bids for highway projects. The government later withdrew the shortlisting criteria.
“The (road transport) secretary has been talking about the supplementary agreement,” said another NHAI official who also didn’t want to be named.
An executive with one of the road builders working on the programme said NHAI officials have informally called up companies to inform them about the supplementary agreement.
“They want it signed by the 15th (of May)...if they (NHAI) want to terminate contracts after that, then let them terminate it now itself,” said the executive, who requested anonymity because he was not authorized to speak to the media.