The government has awarded almost zero projects under the National Highway Development Programme between July and December this year, according to senior government officials. Furthermore, 66 per cent of the projects awarded by the National Highways Authority of India (NHAI) have not achieved financial closure till now. And with the global financial crisis adding to its woes, the NHAI is now wooing bidders as very few have come forward to submit proposal bids for the 23 new projects to be awarded by the close of the calendar year.

According to statistics compiled by the NHAI, the government awarded 61 projects under the build-operate-transfer (BOT) mode till July 31, 2008 after launching the National Highway Development Programme (NHDP) in 1999. However, only 11 of these projects have been completed till date. The estimated value of the 61 projects is about Rs 28,170 crore of which Rs 4,032 crore worth projects have been completed under the public-private-partnership mode.

The key challenge now is to award the 60 projects slated for this year under NHDP Phase III of which none have been awarded so far. Even though the High Court has settled litigation issues which had caused delays in the award of the projects regarding cartelisation in the sector, rising credit costs have forced developers to withdraw their bids in most of these projects. In fact the last date for submission of Request for Proposal (RFP) for 23 of these 60 projects has been postponed from December 5, 2008 to December 21 and 24, 2008. “In fact, some projects to be awarded under PPP mode have as few as one bidder now and consequently cannot be awarded as it will be against competition laws,” a senior government official who did not want to be named said.

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