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Eligibility Rules Changed For Infrastructure Projects

By ugesh sarkar, Section Infrastructure
Posted on Fri May 01, 2009 at 02:24:21 AM EST

Battered by lawsuits and bowing to demand from industry lobby groups, the government has revised some qualification rules for firms looking to participate in auctions for infrastructure projects, reports Mint.

The new rules have suggested increasing the number of shortlisted bidders, amending guidelines relating to conflict of interest for bidding entities and raising the bar on technical capacity of bidders.

These modifications -- finalised by a five-member task force headed by B K Chaturvedi, member, Planning Commission -- will be issued shortly, quoted an official in the shipping ministry in the report.

The revised rules would allow for seven shortlisted bidders (except for national highway projects) from the present six for projects costing more than Rs 500 crore. For projects costing less, eight bidders would be shortlisted.

In the case of national highway projects, all firms that qualify technically will be allowed to submit price quotations, the ministry official said.

Several firms that had qualified on technical and financial parameters but were excluded from auctions of many highway and port projects have challenged in courts the limit imposed on the number of shortlisted firms.

Source: Realty Plus Eligibility rules changed for infrastructure projects

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The new rules also call upon the authorities floating tenders for infrastructure projects to prepare a reserve list of pre-qualified applicants who may be invited to substitute the shortlisted bidders in the event of their withdrawal from the process or upon their failure to conform to tender conditions. Such substituted applicants will be given at least 30 days to submit price quotations.

Under the existing rules, credentials of eligible applicants are measured in terms of their experience score.

The total of the experience scores for all eligible projects an applicant has developed and operated is the aggregate experience score of that applicant.

The revised rules require project implementing authorities to exclude applicants if they are found to make false claims to improve their score.

According to existing rules, an applicant is considered to have a conflict of interest if it has direct or indirect shareholding of more than 1 per cent in another applicant firm or its associate, and in case of a consortium, in any of its members. This limit has now being raised to 5 per cent.

The bar on technical capacity has been raised to twice the estimated cost of a proposed project to pre-qualify entities with greater experience and capacity. The current threshold is equal to the estimated cost of the project.

The new rules have reduced the equity stake to be held by the operation and maintenance partner in a consortium to 10 per cent from 26 per cent earlier.

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