NHAI extended undue benefit to concessionaires through post-tender amendments: CAG

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STATE TIMES NEWS

New Delhi: Apex auditor CAG has pulled up the state-owned National Highways Authority of India (NHAI) for extending “undue benefit to concessionaires by resorting to post-tender amendments”.
The Comptroller Auditor General of India (CAG) also said the Ministry of Road Transport and Highways (MoRTH) failed to adhere to guidelines of the Cabinet Secretariat for circulation and approval of Cabinet notes.
NHAI comes under the administrative control of the Union Ministry of Road Transport and Highways.
“NHAI extended undue benefit to concessionaires by resorting to post-tender amendments,” the CAG said in a report tabled in Parliament.
“The premium payable by the concessionaire was laid down in a legal contract drawn up after an open bidding process, in which premium offered was the one and only parameter in deciding upon the financial bids (request for proposal),” the CAG said in the report.
National Highways are developed under different modes of execution including Build-Operate-Transfer (BOT) or toll, BOT (Annuity), and Engineering, Procurement & Construction (EPC).
In BOT (toll) projects, prospective bidders either quote Viability Gap Funding (VGF) payable to concessionaires or negative VGF/premium payable to NHAI by concessionaires.

“Any post-tender/contract amendment amounts to vitiating the entire tendering process, against the principle of sanctity of contracts and unfair with respect to other bidders,” the government auditor added.
The CAG pointed out that the NHAI proposed a scheme of rationalisation of premium quoted by concessionaires in respect of highways projects.
According to the auditor, the policy or scheme for rationalisation of premium was neither considered nor approved in the NHAI board meeting.
The CAG suggested that NHAI may ensure prevailing provisions of concession agreements are followed before proposing any new scheme for granting concessions beyond contractual provisions. It also recommended that NHAI should avoid post-tender/contract amendments.