Mumbai: The National Highways Authority of India (NHAI) rider, barring contractors from bidding for more projects if they have three in hand that haven’t achieved financial closure, seems to have split the infrastructure industry. Praveen Sood, chief financial officer of Hindustan Construction Co. Ltd (HCC), said in an interview the new condition was unfair on firms like his. Amitabh Mundhra, director of Simplex Infrastructure Ltd, said it would help weed out the not-so-serious firms from the field. Edited excerpts:
Seeking fair play: Hindustan Construction Co. CFO Praveen Sood (left) and Simplex Infrastructure director Amitabh Mundhra.
How does HCC view NHAI’s new directive?
Sood: We recently won three projects under NHAI and all these three projects are less than 10 days old. So obviously we fall into this line. We are taken by surprise with this move...these kinds of moves have to be taken in consultation with involved parties. You cannot change the rules of the game in between...
Do you see this significantly affecting road development?
Sood: ...Not more than 10-15 parties are putting the bid for these kinds of projects. (But) NHAI has got some ambitious plans. From July onwards they have put on block roughly 30 projects and they have plans to put out another 20-30 projects in the next few months...So these 50 projects between 15 parties means almost three projects to each party will be bagged and you will completely block the road, so how will you go forward.
Can Simplex still apply for the next tranche of roads? It will mean reduced competition for you.
Mundhra: There are two views to this. Firstly, Simplex hasn’t ventured into the build, operate and transfer space as of now, so we are happily placed at the moment. But this (NHAI’s) move could be taken with a slight amount of seriousness because a lot of parties (that) have started bidding or earlier bid...were not so financially prudent. Therefore, in NHAI’s mind...the idea was to maybe keep only good parties in the fray...
Does this mean it is a good time for you to enter the fray?
Mundhra: The time has come to take a view on these projects again. Some of the contractual conditions have been looked at pragmatically (by the government) and have been changed... Earlier, some very onerous conditions had made project risk quite high and therefore we stayed away...