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Tendering-and-Procurement

A total of 4,155 project tenders at a value worth Rs 88,199 crore were floated during Q1/FY20. The aggregate value of works proposed through tendering process recorded a fall of 52 percent when compared to 8,706 project tenders at a value of Rs 1,83,237 crore floated in Q1/FY19.

The slowdown in the aggregate value in the tendering process was mainly due to the General Elections which were held in phases for two months, April and May 2019. As a result, the overall downfall was seen in the tendering process by both the Central and state governments.

In all, the work order proposed through the tendering process by state governments reported a fall of 61.44 percent in Q1/FY20 from a year earlier in Q1/FY19. The same trend was also seen by the Central government which posted a fall of 36.04 percent during Q1/FY20.

Overall, the aggregate value of works proposed through tendering by state governments was Rs 51,804 crore (2,495 tenders) Q1/FY20 from Rs 1,34,367 crore (6,664 tenders) in Q1/FY19. Similarly, the Central government also floated 1,583 tenders worth Rs 35,616 crore in Q1/FY20 as against 1,938 tenders worth Rs 48,453 crore in Q1/FY19.

The most notable tender in Q1/FY20 was issued by the Water Resources Department, Madhya Pradesh, for construction of Chhindwara irrigation complex project on turnkey basis. The contract value of the project was Rs 4,450.2 crore.

Another notable tender was issued by the Rail Vikas Nigam in two packages for construction of tunnels, bridges and formation works  between Rishikesh & Karanprayag in Uttarakhand for an aggregate value of Rs 3,269 crore.

The Ministry of Road Transport and Highways (MoRTH) in March 2019 issued guidelines for resolution of stuck road and highway projects due to shortage of funds. Government agencies such as the National Highways Authority of India (NHAI) and the National Highways and Infrastructure Development Corporation (NHIDCL) have been allowed to foreclose the contracts of stuck projects.

Infrastructure Leasing & Financial Services (IL&FS), an infrastructure development company, was contracted work orders mostly in the Roadways sector. However, the company is currently facing financial crisis. The projects which were awarded to the company are either terminated or are taken over by other companies. The balance works of most of these projects are under tendering process.

In the month of June 2019, the National Highways & Infrastructure Devp Corpn (NHIDCL) for construction, operation and maintenance of 6.50 km Z-Morh tunnel, including approaches on Srinagar-Sonmarg section connection NH-1 in Jammu and Kashmir. Originally the project was to be implemented by Srinagar Sonmarg Tunnelway (SSTL), an SPV floated by Soma Enterprises and IL&FS Transportation Networks (ITNL). The foundation stone for the project was laid on 28 September 2012 and letter of award (LoA) for the project was issued in March 2013 with concession period for the project being 20 years. However, till June 2017, less than

five percent of the tunnel work was completed and a year later the project went on hold. The contract awarded to IL&FS Transportation Networks was terminated in January 2019 and now bids are open to undertake the work.

Apart from this, construction of Asia’s longest bi-directional road tunnel, Zojila tunnel (14.20 km) in Srinagar district of Jammu & Kashmir was also bagged by IL&FS Transportation Networks. However, due to no progress of work and financial crisis this contract was also terminated. The tendering process for the project is still underway.

Moreover, the company was also undertaking projects such as Barwa Adda-Panagarh road upgradation, Patna-Gaya-Dobhi road upgradation, Kolkata Metro Project Phase-II, integrated power development scheme at Dumka, Jamtara, Sahibganj and Pakur which will either be foreclosed or terminated.  

In all, the Roadways sector topped the table with a total of 1,022 project tenders worth Rs 26,151 crore in Q1/FY2020. However, when compared with the same period a year earlier a steep fall was registered as 2,969 project tenders worth Rs 66,608 crore were floated in Q1/FY19.

The Railway sector grabbed second position with 758 tenders worth Rs 18,965 crore being floated in Q1/FY20. Of these, the Rail Vikas Nigam floated 16 tenders worth Rs 5,136 crore, East Central Railway floated 71 tenders worth Rs 1,591 crore and Ircon International issued 18 tenders valuing Rs 1,463 crore.

One of the notable tenders in this sector was issued by the National High Speed Rail Corporation for construction of tunnelling works including testing & commissioning for double line high speed railway using tunnel boring machine (TBM) and New Austrian Tunnelling Method (NATM) between Mumbai underground station at Bandra-Kurla complex & Shilphata for construction of Mumbai-Ahmedabad High Speed Rail in Maharashtra.

The Rail Vikas Nigam (RVNL) issued tender for construction of foundations, substructure for five important railway bridges over Donal Khad, Dabatwali Khad of Bhanupali-Bilaspur-Beri new BG line in the states of Punjab and Himachal Pradesh. The contract value of the project was Rs 708.66 crore.

The Community Service sector which floated Rs 24,106 crore of project related work through tendering in Q1/FY19 also registered a fall with Rs 7,523 crore being floated in Q1/FY20. In all 652 tenders were floated in this sector. The Defence Research & Development Organisation issued a tender for construction of Nau Sena Bhawan-I in New Delhi worth Rs 363.81 crore.

Water Supply which is another major industry registered a fall of 57 percent Y-o-Y in the tendering process with 339 tenders worth Rs 5,572 crore being floated in Q1/FY20. The same sector issued 1,065 tenders worth Rs 13,080 crore in Q1/FY19. Meanwhile, the Irrigation sector floated 187 work-related tenders with a value of Rs 13,683 crore in Q1/FY20.

Among the states, the top 10 ones – Karnataka, Maharashtra, Uttar Pradesh, West Bengal, Gujarat, Jharkhand, Rajasthan, Bihar, Madhya Pradesh, Odisha – accounted for 65.46 percent of the total project tenders announced across the country.

Major consultancy tenders

  • The Irrigation & Flood Control Dept, Jammu & Kashmir, for preparation of detailed project report (DPR) for construction of 21 lift irrigation schemes in Billawar from pondage of the proposed Ujh multipurpose project.
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  • Tamil Nadu Urban Infrastructure Financial Services for preparation of DPR for underground sewerage projects in Tamil Nadu.
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  • The Public Works Department, Manipur, for preparation of feasibility study & DPR for two-laning with paved shoulder from Shangshak to Tengnoupal on NH-39 (102A extn) in Manipur.
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  • The Municipal Corporation of Greater Mumbai for preparing detailed engineering & PMC for Gargai dam and tunnel project in Maharashtra.
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  • NHAI for preparing DPR for construction of new six-lane capital region ring road from Palatotapada (NH-16) to Kuspang Road (length 68.724 km).

In all, 4,155 project tenders worth Rs 88,199 crore were published during Q1/FY20. Among the floated tenders, 507 tenders were for providing various consultancy services. It also witnessed 97 expressions of interest (EoIs) being published for providing various services and execution of works. The period also witnessed 509 re-invitations. The lack of participation forced tender issuing authorities to extend the last date of submission of 2,050 project tenders. These were mainly in the Roadways, Irrigation and Water & Sewerage Pipeline & Distribution sectors.

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