NHAI blamed for encouraging irresponsible bids

28 Jan 2013 Editorial Team

One of the reasons for companies like GMR and GVK walked out of big-ticket road projects is that the companies are over-leveraged, said Gajendra Haldea, Infrastructure Advisor to Planning Commission Deputy chairperson Montek Singh Ahluwalia. The bureaucrat's statement comes in days after infrastructure majors GMR and GVK walked out of road projects.

Haldea blamed the National Highways Authority of India (NHAI) for encouraging 'irresponsible and aggressive' bids and criticised private developers who expect a bail-out later. In their desire to acquire more business, the private developers bid aggressively and didn't have enough equity, he said before blaming the NHAI for encouraging such irresponsible bids.

Haldea said that the manner in which bidding has been carried out by NHAI is incorrect. 'If you have 20 people bidding, very serious people may stay away,' he said and pointed to developed countries like the US that legally limit the number of bidders to five.

Haldea said that he has been arguing that infrastructure projects cannot be bid like this and added that NHAI has 'aggressively' opposed the idea. The problems in most infrastructure projects is because of 'people who want to take on the biggest projects and then cut corners.'

Montek's influential advisor's comments assume significance at a time when two of the country's largest infrastructure players have walked out of road projects worth 10,700 crore. The country is looking for $175 billion investments in roads by 2016-17 - 17% of the $1 trillion infrastructure target for the XIIth Five-Year Plan.

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