The government decision against awarding of more than two annuity road sections to a single player has created a piquant situation, with the Pun Lloyd group emerging as the lowest bidders for three sections under two different consortia.
While the Gammon-Pun Lloyd group has emerged as the lowest bidder for both the Rajahmundry-Dharmavaram and the Dharmavaram-Tuni stretches on NH-5, the IL&FS-Punj Lloyd combine has quoted the lowest semi-annual amounts for the upgradation of the Belgaum-Maharashtra border annuity section.
The National Highways Authority if India (NHAI) board is expected to take a decision on the matter, keeping in view the modalities of the partnership in case of both the ventures, when it meets at the end of this month.
Pun Lloyd is the lead financial member in its venture with Gammon, while it is the technical lead member in the venture with IL&FS, said officials.
"The main reason for limiting only two annuity sections to a single player is to spread the responsibility of implementing the annuity stretches to different operators, as under the annuity model the government will have to fork out substantial amount of money to operators over a concession period spanning 15 years," an official said. We do not want to be left depending on a few companies for implementation of all the stretches, he added.
However, with Pun Lloyd-led consortium quoting the lowest for three stretches, opinions are divided among officials on whether to award all three stretches to the groups.
"Just by forming separate consortia, a single company should not be awarded all the stretches, if hedging of risk is the prime reason for putting such a rule in the first place," an official said.
Pun Lloyd, in combination with Gammon, has quoted a semi-annual annuity amount of Rs 229.61 crore for upgradation of the 54 km Rajahmundry-Dharmavaram stretch and Rs 27.91 crore for the 46 km long Dharmavaram-Tuni stretch. Pun Lloyd's other consortium with IL&FS has quoted Rs 50 crore for the Belgaum-Maharashtra border.
In an earlier case where the GMR Group had bid the lowest annuity amounts for three stretches, the NHAI board had awarded two stretches to the company and is reportedly negotiating with the second lowest bidder - the Unitech BFL group - for scaling down its annuity quotes for the third section.
The government has earmarked seven stretches (totaling around 400 km) for being awarded on the annuity model, as a variant of the BOT (build, operate, transfer) scheme, for upgradation of national highways under the Rs 54,000 crore National Highways Development Project. Bids have been opened for all the annuity stretches and two projects have already been awarded by the NHAI board to the GMR Group, with other sections expected to be taken up by NHAI over the next few weeks.
Under the annuity tolling method, an operator does not collect tolls from the users directly but instead would get a fixed semi-annual payout from the NHAI to compensate him for the capital cost and operating expenses of the project. The payouts would start only after three years from start of construction and would continue throughout the concession period spanning 15-18 years.
