20 highway projects may go for re-bid if govt approves report.

As many as 20 road projects worth Rs. 20,000 crore, awarded between 2011 and 2013, could be scrapped and might be re-bid if the Cabinet approves the recommendations made by a panel led by the Prime Minister's Economic Advisory Council chairman, C Rangarajan, on rescheduling of premiums. The projects haven't taken off because of unfavorable economic conditions and lack of funding. Developers were seeking lenient premium-rescheduling norms.

According to experts, the projects have seen an escalation of 30 per cent on account of costlier land and raw materials. Earlier, National Highways Authority of India (NHAI) Chairman R P Singh had also written to the roads ministry about the rising costs. According to the letter, projects witnessed a 26 per cent rise in costs in the past two years and private developers were seeking the rescheduling to factor in the rising costs of construction, on the back of an economic slowdown. 'In all likelihood, the developers would walk out of the projects. If they go for re-bids, that will essentially mean we will not see aggressive bidding or may have to seek the government to fund the projects,' said a senior NHAI official.

BS