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Court boost to 60 highway projects

Delhi High Court has removed the legal hurdles in the way of 60 road projects of National Highway Authority of India (NHAI) across the country, reports Harish V Nair.

business Updated: Nov 12, 2008 22:01 IST
Harish V Nair

Delhi High Court has removed the legal hurdles in the way of 60 road projects of National Highway Authority of India (NHAI) across the country

The court dismissed a petition filed by the National Highways Builders Federation (NHBF) against a competition limiting clause introduced by the NHAI in the request for qualification with respect to highway tenders floated for Phase- V of the National Highway Development programme. NHAI envisaged six laning of 6,500 km of existing 4 lane highways under the phase.

Said a Bench of Justices Mukul Mudgal and Manmohan: “In our view any delay in award of highway projects to the successful bidder would constitute a serious setback to a development programme of national importance and would be detrimental to public interest”.

The tender condition was that although a party may technically pre-qualify, it can only enter the second phase of the tender that is the Request for Proposal (RFP) stage. Therefore in a given case there may be a large number of technically pre-qualified bidders but as they had not been shortlisted among the first six bidders, they would not be entitled to participate at price bid stage.

It effectively put a cap on the number of highway projects a company can bid. The petitioners who challenged the clause were some of the bidders who were not permitted to file their price bids.

The lawyer for Larsen and Tubro Abhishek had told the court that once a bidder meets the threshold criteria then criterion of an artificial sub-class with the pre-qualified bidders would amount to equals being treated unequally. GMR Infrastructure’s lawyer said the clause vested with the government the right to “play around with and possibility of favoritism as well as restricting the competition cannot be ruled out”.

Terming the clause as “legal, valid and consitutional”, the judges said: “The clause was introduced by NHAI pursuant to a policy decision taken at highest level after due and detailed deliberations… .the objective was to identify credible bidders who would provide world class infrastructure services in India. The objective was sought to be ensured by pre-qualifying only high quality firms with best available track record and therefore the government has a right to enter into contract with a particular class of companies”.