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.

“What is to be noted is that that the model concession agreement has been in place since 1.5-2 years and there has been hardly any progress in the period. Most of the projects that were done in 2006 were a carry forward of those launched in 2004,” said Jayesh Desai National director Infrastructure, Real Estate and Government Services.

The senior industry expert also said that a period of 45 days prescribed by the NHAI for submission of bids is not enough to assess the inherent risks in a project.

Even though the government has faced flak for its incompetence in awarding PPP projects from developers, the story remains the same with annuity as well. Of the 25 projects awarded upto July 31, 2008 it managed completion of only 8. The total estimated investment for these projects was Rs 9,412 crore of which projects worth Rs 2,354 crore achieved financial closure.