Project tendering activities regained momentum post lifting of lockdown in June 2020. Reflecting on this, the number of project-related tenders floated in Q2/FY21 increased sharply. As against 5,996 tenders worth Rs 1,84,684 crore issued in Q1/FY21, the second quarter saw issuance of 9,297 project tenders worth Rs 1,80,843.8 crore.
The fall in high value (Rs 1,000 crore and above) tenders in Q2/FY21 saw the aggregate value of tenders declining by 2.1 percent on Q-o-Q basis. As against 30 high-ticket tenders worth Rs 63,745 crore issued in Q1/FY21, only 17 such tenders worth Rs 42,232 crore were floated in Q2/FY21.
Tendering activity by Major Sectors
In the second quarter of this fiscal, the Manufacturing, Mining and Services & Utilities (Infrastructure) sectors witnessed positive growth. In terms of value, the Mining sector posted the highest growth of 39.4 percent on Q-o-Q basis. The sector saw 77 project tenders worth Rs 26,817 crore being floated as against 98 tenders worth Rs 19,236.6 crore issued in the preceding quarter.
Further, of the 77 tenders floated, 36 tenders with an aggregate value of Rs 26,741 crore were published in the Coal Mining sector during Q2/FY21. Of this, five were mega value (Rs 1,000 crore and above) tenders. South Eastern Coalfields and Central Coalfields issued two tenders each and Mahanadi Coalfields issued one.
Central Coalfields floated tenders for development and operation of Sanghamitra OCP and Chandragupt OCP in Jharkhand in MDO mode through a mine operator worth Rs 9,183.2 crore. Similarly, South Eastern Coalfields issued tenders for development and operation of Pelma OC and Madannagar OC in Chhattisgarh worth Rs 8,194.11 crore.
The infrastructure segment saw 8,344 tenders worth Rs 1,37,437.68 crore being floated during Q2/FY21. The sector accounted for 76 percent of the total value of tenders floated during the quarter. The number of tenders issued in this sector grew from 5,234 in April-June 2020 to 8,344 in July-September 2020.
Project tendering activities in the Railways, one of the major tendering sectors, registered two-fold increase in terms of value in the second quarter vis-à-vis the preceding quarter. As against 220 tenders worth Rs 8,532.82 crore issued in Q1/FY21, 416 tenders worth Rs 23,379.22 crore were floated in Q2/FY21.
The most notable tender in this sector was issued by the Rail Land Development Authority (RLDA) for redevelopment of New Delhi railway station at a cost of Rs 4,925 crore. Similarly, the Indian Railway Stations Development Corporation invited bids for redevelopment of Chhatrapati Shivaji Maharaj Terminus in Mumbai, Maharashtra, at a value of Rs 1,642 crore.
Another notable tender was issued by the Delhi Metro Rail Corporation (DMRC) for construction of a twin tunnel at Rajendra Nagar and six underground metro stations – Rajendra Nagar, Moin Ul Haq Stadium, University, PMCH, Gandhi Maidan & Akashvani — on new ISBT to Patna Station of Corridor-2 of Patna MRTS Phase-I.
Despite issuing 238 more project tenders, in Q2/FY21 the aggregate value of tenders issued in the Roadways sector registered a fall of 17.8 percent on Q-o-Q basis. In all, 2,027 tenders with an aggregate value of Rs 49,420 crore were floated in July-September 2020.
Three nodal agencies — the National Highways Authority of India (NHAI), the Ministry of Road Transport & Highways (MoRTH) and the National Highways & Infrastructure Development Corporation (NHIDCL) — issued 314 tenders for various works worth Rs 28,765.48 crore and accounted for 58.20 percent of the tenders issued during Q2/FY21.
NHAI issued five notable tenders for construction of four-lane greenfield Delhi-Amritsar-Katra Expressway worth Rs 4,745.17 crore. The national highway builder also floated tenders in five packages (I to V) for construction of four-lane access-controlled new greenfield highway section (Khammam-Devarapalle) worth Rs 2,917.3 crore.
The Water & Sewerage Pipeline & Distribution sector saw 1,141 tenders with a total value of Rs 21,977 crore being floated. The Madhya Pradesh Jal Nigam Maryadit and the Uttar Pradesh State Water & Sanitation Mission issued tenders of an aggregate value of Rs 11,068.41 crore.
The Uttar Pradesh State Water & Sanitation Mission floated 13 tenders for survey, design, preparation of DPR, construction, commissioning of various rural water supply projects in Agra, Aligarh, Ayodhya, Azamgarh, Devipatan, Gorakhpur, Kanpur, Lucknow, Meerut, Moradabad, Prayagraj and Varanasi divisions. The aggregate value of these tenders was Rs 5,200 crore.
A mega value tender worth Rs 1,649.63 crore was issued by the Madhya Pradesh Jal Nigam Maryadit for engineering, procurement, construction, testing, commissioning, trial run of various components of Rajghat Dam Multi Village Scheme in Guna& Ashok Nagar districts.
The Other Community Services sector, comprising setting up of educational institutes, hostels, libraries, etc posted a handsome increase of 54.8 percent in terms of total floated tender values. Tendering activities in this sector grew from 1,222 tenders worth Rs 8,930 crore in Q1/FY21 to 2,369 tenders worth Rs 14,095 crore. The Rail Vikas Nigam floated a notable tender for construction of the National Rail & Transportation Institute at Vadodara in Gujarat at a cost of Rs 800 crore.
The Irrigation sector witnessed 464 tenders worth Rs 13,305 crore being floated in Q2/FY21. Three mega value tenders were issued by the Irrigation & CAD Department, Andhra Pradesh, in Q2/FY21. These include:
- Draw and utilise three TMC per day from Sangameswaram to SRMC at 4.00 km from Pothireddypadu Head Regulator for Rayalaseema Lift Scheme under EPC turnkey system worth Rs 3,278.19 crore.
- Lining of the existing SRBC/GNSS canal up to berm level to draw 30,000 cusecs in-between Gorakallu to Owk reservoir including Owk Tunnel-III worth Rs 1,269.49 crore.
- Upgradation of canal system from Pothireddypadu head regulator & BCR complex from Banakacherla Complex to Gorukallu Balancing reservoir worth Rs 1,061.69 crore
- The Electricity sector saw issuance of 249 tenders worth Rs 2,245 crore in Q2/FY21 as against 173 tenders worth Rs 2,270 crore in the preceding quarter.
Project tendering activities in India are dominated by the public sector units and agencies. The share of the private sector has never exceeded beyond one or two percentage points.
Following the unlocking of the economy, the tendering activities increased both at state and Central level. The state government agencies issued 7,145 tenders worth Rs 93,130 crore during Q2/FY21 as against 4,547 tenders worth Rs 97,351 crore published in Q1/FY21. On the other hand, the Central government floated 2,033 project tenders worth Rs 87,365 crore in Q2/FY21 as compared to 1,408 project tenders with a contract value of Rs 87,056 crore issued during Q1/FY21.
Among the states, the top 10 – Uttar Pradesh, Karnataka, Gujarat, Tamil Nadu, Madhya Pradesh, Maharashtra, West Bengal, Bihar, Assam, Odisha, in that order – accounted for 52.24 percent of the total tenders announced across the country during Q2/FY21.
Uttar Pradesh topped the table with 996 tenders worth Rs 15,673 crore, followed by Karnataka with 941 tenders worth Rs 14,331 crore. A total of 733 tenders with an aggregate value of Rs 12,257 crore were issued for various works across Gujarat.