'Swiss Challenge' to select Outer Ring Road bidder

The Andhra Pradesh government is going to adopt the 'Swiss Challenge' method for selection of a developer for the Outer Ring Road (ORR) project of Hyderabad.

The entire project, which is now estimated to cost anywhere between Rs 8,000 crore and Rs 9,000 crore, would be handed over to a single international consortium for execution.

Explaining the rationale behind adopting the 'Swiss Challenge' method, L V Subrahmanyam, vice-chairman and managing director of Infrastructure Corporation of Andhra Pradesh (INCAP), said: "We want to have a partner with us at the project's conceiving stage itself. You cannot just tender the work of this proportion to somebody and relieve yourself of your responsibility. That cannot work here."

The basic report along with the master plan for the ORR project, which is being prepared at its own cost by the Department of Economic Development, Government of Dubai, under a recent MoU with the Andhra Pradesh government, is expected to be ready by March-April 2006. The project report would form the basis for initiating pre-qualification process.

As part of its basic premise of government-to-government understanding for the development of the ORR project, the state government has signed an MoU with Dubai for preparation of the project report.

The basic cost, rate of return and the viability requirements to be proposed by the Dubai government would be allowed to be challenged by the other pre-qualified players and then the former would be given a chance to match the latter's offer under the 'Swiss Challenge' method.

The government would offer nothing to the successful bidder except some land along the proposed outer ring road which it can utilise for development of clusters or townships as a source of return on investment.

It has already issued orders for creating a land bank where all the vacant land belonging to various departments would be pooled up and utilised as per the priorities to be determined by a separate three-member official committee.

Whichever company or consortium pitches for less land will emerge as the successful bidder, the Incap managing director said. The allocation of land for cluster development forms part of cost recovery mechanism for the project as the outer ring road would be toll-free.

As per the self-imposed norm of government-to-government understanding, the state government would insist on a government-led consortium or company or any other body of a country to execute the project. Further, Incap would also prepare a detailed project report (DPR) of its own to avoid the possibility of padding up the project costs.

According to government officials, companies from several countries, including Japan, Malaysia, Czhekoslovakia and Singapore have already evinced interest in taking part in the pre-qualification process. Some Chinese companies have also made initial enquiries with Incap about the project recently.

The ORR project, to be christened 'Greater Hyderabad Growth Corridor' project, has three basic components, which, according to the officials, are inseparable from each other to ensure viability of the project.

The three components include the eight-lane ring road with interchanges and approach roads, basic infrastructure facilities for the development of a 20,000-sq km knowledge corridor near Madhapur and clusters of about 25 townships.

Not to leave any scope for delay that could potentially affect the viability of the project, the state government has decided to execute the entire stretch of approximately 165-km long 8-lane Outer Ring Road (ORR) at one go.

This means the basic road facility or access is expected to be provided within two years coinciding with the completion of the new international airport in March 2008. The proposed road, which provides non-stop entry and exit points to the fully access controlled ORR along with interchanges, will be built in another one to one-and-half-year as they require careful and aesthetically appealing design and execution, officials said.

The project is expected to bring a qualitative shift in the development of Hyderabad as it will enable horizontal expansion of the city which has vast extent of open lands available around it, with wider roads and better houses at lower cost.

"Vertical spread has proved disastrous for Hyderabad which is already under severe stress on the infrastructure front. Moreover, with the ORR, distance will not become a great disadvantage," Subrahmanyam said while stating that the project is being designed to enable any person from any part of the city to reach the international airport within one hour.

Besides the existing national and state highway points, about 22-23 radial roads are proposed to be developed to connect the core of Hyderabad Municipal Corporation (MCH) area to the outer ring road, keeping in line with the idea of providing access points at every 8 km distance along the ORR.