New Delhi: Process will require cos to offer unique ideas to projects in terms of tech or execution. India is readying to throw down a so-called Swiss challenge at private developers of highways in an approach that is known to spur competition as it allows companies to come forward with unsolicited ideas and grants the first right of refusal to the developer that prepares the detailed project report.
The ministry of road transport and highways is finalising a proposal to allow this method for some projects for the first time, officials said.
"The company which has the prepared the DPR (detailed project report) would be well aware of project requirements and prepared to take it on faster than anyone else," aid a senior government official, requesting not to be named.
The ministry feels this can help throw up innovative ideas and expedite development of highways in India, the official said, although this method is not widely practiced in infrastructure sector globally except in a few South American countries.
The Andhra Pradesh government has already decided to use this method to award some projects for construction of its new capital.
According to experts, the move will generate greater interest among private players and encourage developers to come forward with unsolicited project ideas.
For instance, projects which require expertise in construction of bridges with the use of special technology or high ways in difficult terrains such as mountains could benefit from the Swiss challenge system.
The process will require companies to offer something unique to the project in terms of technology or execution so that the company preparing the DPR is in a strong position to challenge the bids of other participants, they said.
"It is a faster way of awarding contracts. Inviting bids in such a case is just to test the market response so that the price is fair," said Vikash Sharda, associate director-infrastructure at PwC India.
Experts warned, however, that the policy guidelines will have to be clear so that the company preparing the DPR does not manipulate the system. The ministry raised the target of awarding highways projects this year to Rs. 3.5 lakh crore from Rs. 2.5 crore planned earlier, after Finance Minister Arun Jaitley said infrastruc ture needs urgent and greater stress.
For timely award and funding 1,231 projects for 37,000 km over the next two years the government wants to use all options including foreign pension funds, private equity investors and funding from other countries. The road ministry has also decided to remove all level crossings on national highways by constructing rail overbridges and underbridges under Setu Bharatam Pariyojna.
It has identified nearly 1,500 old bridges and is in the process of appointing consultants.Besides, the government wants to start a project to connect remote areas along the border and religious and tourist places by next year.
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