HAM projects: Road Ministry tightens bidding regulations, Pg19

Key Highlights:

• The Ministry of Road Transport and Highways (MoRTH) has tightened bidding regulations for Hybrid Annuity Mode (HAM) projects, effective April 29.
• Bidders with a record of catastrophic failure of any highway structure due to construction defects within the past two years may face disqualification.
• The modified provision applies to both ongoing and completed projects under HAM, a public-private partnership model.
• MoRTH defines catastrophic failures as collapse of bridges, flyovers, underpasses, embankments, tunnels, or Pavement Quality Concrete (PQC).

Detailed Insights:

• The stricter norms aim to deter construction-related failures and strengthen quality in national highway development, extending provisions previously applied to Engineering, Procurement, and Construction (EPC) projects.
• Under HAM, the government pays 40% of the project cost during construction, with the remaining 60% paid as annuity payments over the operations period.
• Evaluation criteria now include a deduction of 30 marks for catastrophic failures that substantially impact project quality, lead to loss of lives, or cause lasting damage requiring reconstruction.
• Bidders must submit an undertaking declaring no involvement in any catastrophic failure due to construction defects within the specified period, and the modified provisions will be incorporated into all ongoing and future HAM bid documents.

Key Concepts Involved:

• Hybrid Annuity Mode (HAM): A public-private partnership model where the government pays a portion of the project cost during construction and the rest as annuity payments.
• Engineering, Procurement, and Construction (EPC): A common form of contracting arrangement where the contractor is responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the end-user or owner.