What proportion of India's central tendering consists of road projects?

How much does a bridge cost if it is purchased in two parts?

1,077 metres, priced separately. The Iconic Hybrid Cable-Stayed and Suspension Bridge spanning the Krishna River on NH-167K, near the border between Nagarkurnool in Telangana and Andhra Pradesh, is being tendered on its own on an EPC basis, covering the design chainage from km 87.360 to km 88.437, with a main span of 864 metres. The approach sections, from km 79.300 to km 87.360 on one side and from km 88.437 to km 93.819 on the other, are being tendered as a separate package. Both tenders conclude on 28 September.

Dividing a river crossing from its approaches is a purposeful way of allocating risk rather than an administrative matter. The main span involves specialist work: cable-stayed and suspension construction requires a contractor with experience in pylons, stay-cables and deck launching, and the number of contractors in India capable of carrying out that work is limited. The approach works, by contrast, are conventional embankment and structure works that a competent road contractor could price without needing a specialist partner. If the entire project had been tendered as a single package, the specialist risk premium would have applied to the whole length.

According to our interpretation of the two notices, the authority has concluded that it is cheaper for them to bear themselves the interface risk between the structure and its approaches than to pay a contractor to do so. This is the opposite of the decision made last week by V.O. Chidambaranar Port, where the breakwater, rock bund, wharf, dredging and reclamation were tendered as one package specifically so that a single contractor could be responsible for the interface. Two different authorities, within one month, reaching opposite conclusions on the same issue.

Source and reference: Central Public Procurement Portal. It is necessary to check the date on the portal before taking any action. · etenders.gov.in · MoRTH tender listings

What is the length of India's longest single road contract this month?

168.180 kilometres. The permanent restoration of NH-144A extends from the existing chainage point km 30.053 to km 229.730, a section which the same tender also refers to as design chainage from km 30.000 to km 198.180. The contract ends on 28 September.

Restoration is not the same as resurfacing. A permanent restoration contract of this magnitude typically occurs when the damage exceeds what can be covered by the annual maintenance budget, and it is awarded as a single contract because dividing it would require spreading out the mobilisation over the terrain, where mobilisation costs are the most expensive part. The fact that there are two chainage systems mentioned in the same notice is worth noting in itself: existing chainage refers to the road as it currently is, design chainage refers to the road as it will be, and the difference between the two is 31.497 kilometres.

We interpret that difference as representing a realignment, although that is an inference drawn from the chainages and is not stated in the title. When the package is considered in the context of the rest of the tender list, it becomes even more noticeable. The Ministry of Road Transport and Highways has 285 active tenders on the portal, and the vast majority of these are for short-term maintenance, special repairs and strengthening. A single contract of 168 kilometres is the exception, and it is in such exceptions that the margin lies.

The scale of the contract determines who can participate. A contract of this length excludes the regional contractors who handle most of the maintenance work and instead includes only the small number of companies that are able to manage multiple sites simultaneously using their own plant. This narrowing of the field is something to watch, since a tender list that consists mainly of small repairs with a few very large packages results in a two-tier supplier market rather than a fully competitive one.

Source and reference: Central Public Procurement Portal. Before taking action, make sure you confirm the date on the portal. · etenders.gov.in · MoRTH tender listings

Why is one section of the bypass being procured on a hybrid annuity basis rather than through an EPC?

The Hybrid Annuity Model is once again being used. The western section of the Gonda Bypass on NH-330B, a 20.570-kilometre stretch with four lanes and a paved shoulder, has been excluded from the Request for Proposal (RFP) under the Hybrid Annuity Model instead of being tendered on an EPC basis. The RFP closes on 30 September, and it is not the only annuity package on that highway.

The Hybrid Annuity Model is a financing arrangement, not a method of procurement. The authority funds part of the project cost during construction against the achievement of various milestones and pays the remainder in the form of annuities over the concession period, including interest on the amount still outstanding. The concessionaire assumes the risks of construction and maintenance but not those relating to traffic, and this single difference is what sets it apart from a toll concession and from a standard EPC contract.

There is another annuity package on the same highway. The Colonelganj bypass, from km 25.700 to km 38.500 of NH-330B, with a designed length of 14.100 kilometres, is also available in the market under the Hybrid Annuity Model. Having two HAM packages on one national highway is a different signal from having just one. It indicates that the model is being applied to a whole corridor rather than being tested on a single project, and this is the version that is worth watching.

A return to annuity structures means that it is a balance sheet decision. With an EPC approach, the entire cost is borne by the budget during construction. In the case of the Hybrid Annuity Model, most of the cost is deferred to future annuities. The choice between the two reflects the authority's cash position, and bypass projects are where this decision is usually made first, since they are small enough to allow the structure to be tested.

Source and reference: Central Public Procurement Portal. Be sure to check the date on the portal before acting. · etenders.gov.in · MoRTH tender listings

What proportion of India's central tendering consists of road projects?

11.3%. On 7 September the central procurement portal had 2,516 live tenders posted by 236 organisations. 285 of these were issued by the Ministry of Road Transport and Highways. That means that for every nine live tenders handled by the central government, one comes from that single ministry.

This figure is worth bearing in mind when the highway programme is usually discussed. Public talk about Indian roads tends to focus on corridor names and package values, suggesting that the programme is based on a small number of very large contracts. However, the tender data tells a different story. The fact that one ministry has 285 live tenders is evidence of a high-frequency, high-volume purchasing activity, and 237 of those 285 are due to close between 8 and 30 September.

The degree of concentration also determines the scale for all the other ministries. In our view, a supplier who treats the portal as if it were a single market has misunderstood it. It is in fact one very large buyer and 235 much smaller ones, and each has a different sales approach.

There is a second implication for anyone who is trying to understand the market rather than just selling into it. Since one ministry accounts for so much of the activity, any national statistic derived from tender counts is essentially a statistic about roads, with all the other sectors acting as background noise. This point should be kept in mind the next time a figure showing the number of live central tenders is used as evidence of overall infrastructure activity.

Source and reference: Central Public Procurement Portal. Be sure to check the date on the portal before taking action. · etenders.gov.in · Tenders by Organisation

Where is the highway programme actually building new road?

It is in the North East and Odisha. Although the tender book is mainly focused on maintenance, special repairs and strengthening, the new construction work this month is concentrated in two areas, neither of which would be expected based on a corridor map.

In Arunachal Pradesh the Frontier Highway, NH-913, is being supervised alongside the construction work. Separate Authority Engineer consultancy contracts have been issued for the Huri to Taliha section in three parts, for the Lada to Sarli section in four parts, for the Bomdila to 9th Mile to Nafra to Lada section in two parts, and for the Taliha to Tato section. Since the supervision has been procured through that many separate packages, the actual construction work underneath is already underway and being carried out on multiple fronts at the same time.

The situation in Odisha is different: it involves bridges and bypasses rather than a single corridor, with separate construction packages on NH-26, NH-59, NH-157 and NH-326A. Neither of these groups looks like a corridor programme. In our view, both of them represent state-level expansion taking place under the name of a national highway, which is a different market to target and a different one to finance.

The absence of work is just as revealing as the presence. The corridors that are most frequently discussed in the public arena are not the ones where new construction is currently being tendered, because those corridors have already been awarded and are now generating maintenance and supervision work. A contractor looking at the news to decide where to mobilise would be two years behind. The tender book provides the earlier indication.

Source and reference: Central Public Procurement Portal. Make sure to confirm the date on the portal before taking any action. · etenders.gov.in · MoRTH tender listings