GAMMON INDIA LIMITED

Source: Ministry of Finance
Guidelines for pre-qualification of bidders for PPP projects
One of the key factors that determines the success of a PPP project is the criteria for selection of the project
sponsor, since such projects typically involve large capital investments for providing essential infrastructure
services to users on a long term basis. A bidder lacking in sufficient technical and financial capacity can
jeopardize the project whereas selection based on negotiations or inadequate competition can deprive the
users of the assurance that they are paying a competitive price. A variety of technical, financial and other
criteria are used by project authorities and in some cases technical proposals are also invited along with
financial bids. Some of the qualification parameters are subjective and prone to disputes.
The Committee on Infrastructure (“CoI”) chaired by the Prime Minister constituted an inter-ministerial
group to arrive at the guidelines to be laid down for pre-qualification and short-listing of applicants who
should be invited to make financial offers. Following extensive consultations with stakeholders and experts,
the group submitted its recommendations that were accepted by CoI and issued the guidelines. The
guidelines include a model request for qualification (“RFQ”) document that ministries and autonomous
bodies are expected to follow. The original guidelines were modified on May 18, 2009 to give effect of the
feedback and experience that was witnessed during the last year.
Number of bidders to be pre-qualified
The number of bidders to be pre-qualified and short-listed for the final stage of bidding is carefully
considered. On one hand, the number of bidders should be adequate to ensure real competition in bidding.
On the other hand, a large number of short-listed bidders is viewed as a factor that dampens participation by
serious bidders. For these reasons, the guidelines suggest approximately six pre-qualified bidders for
projects costing Rs.5,000.00 million and more and seven pre-qualified bidders for projects costing less than
Rs.5,000.00 million. The bidding authority reserves the right to increase the short-listed bidders to six, at its
own discretion. In case short-listing is to be done for two or three projects at the same time, the number of
short-listed bidders could be increased to seven and ten, respectively.
The Road Sector in India
The Indian road network, at approximately 3.32 million kilometers in length, is the second longest road
network in the world after that of the United States of America. For the purpose of management and
administration, roads in India are divided into the following categories: (1) "Expressways" which are
intended to facilitate long distance inter-city/state passenger and freight traffic across the country at an
average speed of at least 80 kilometers per hour, (2) “National Highways” which are intended to facilitate
medium and long distance inter-city/state passenger and freight traffic across the country, (3) “State
Highways” which are supposed to carry traffic along major centers within each state, (4) “Major District
Roads” which have the secondary function of linking main roads with rural roads and (5) “Other District
Roads” and “Village Roads” which provide villages accessibility to meet the social needs of such villages
and also the means to transport agriculture produce from villages to nearby markets.
Indian Road Network Kilometers (approximate)
Expressways ............................................................. 200
National highways .................................................... 66,590
State highways.......................................................... 131,899
Major district highways............................................ 467,763
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