NEW DELHI: Highway construction agencies, including NHAI, are in a bind over the recent trend of road contractors quoting low bids of up to 48% less than the estimated project cost, largely due to aggressive bidding, which usually has a direct bearing on the quality of work.In a recent case, the road transport ministry cancelled a tender for a project in Manipur as the contractor with the lowest bid quoted 47% less than the cost the ministry had estimated. The contractor challenged the bid cancellation in Gauhati high court, and the court ordered an interim stay. “This case is a classic example of how highway agencies are caught in the middle. Highway contractors are getting projects quoting low bids arguing they have quoted price after carrying out detailed assessment,” said an official.Data since April 2023 showed that because of less number of projects being offered, there is fierce competition among bidders. For each tender, the number of bidders is in the range of seven to 19.

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Officials and industry insiders said that while there has been a huge increase in the number of highway contractors in the past 7-8 years, with govt rolling out a large number of projects and also bringing down the qualification criteria, there has been a significant fall in the number of works being bid. “This has resulted in players quoting low bids to ensure that their manpower and machinery do not lie idle, which causes further financial stress. This trend will hurt the sector and quality of work as well since we can’t reject a lowest cost or L1 bid in construction works,” said another official.The details of some of the low quoted bids since 2023-24 showed that a project in Madhya Pradesh – four-laning of Rahatgarh to Berkhedi – was bid out at Rs 324 crore, which was 48.4% less than NHAI’s bid cost of Rs 627 crore. In the case of another project in Maharashtra – augmentation of existing stretch in urban areas of Pune on the Pune-Satara section – was bid out at Rs 321 crore, around 46% less than the project cost estimated by the highway authority.Similarly, the work for four-laning from Dareota to Kalar Bala in Himachal Pradesh was tendered at Rs 435 crore against NHAI’s project cost of Rs 734 crore this year, which was around 41% less.