Ministry of Highways reinstates bid security standard to control unserious players in bagging projects

NEW DELHI: The Ministry of Road Transport and Highways on Tuesday reinstated the provision of compulsory deposit of the amount of Bid Security or Security Deposit (EMD) by all bidders for any road project or consultancy work. This came amid concerns over a growing tendency for non-serious players to offer abnormally low prices – even up to 30% below government threshold prices – which the ministry says could have a impact on the quality and timely completion of the work.
The provision of the bid security amount was discontinued during the Covid-19 pandemic by the government in view of the difficulties faced by highway builders. According to a circular issued by the expenditure department of the Ministry of Finance, this was applicable for all calls for tenders launched until December 31, 2021.
The Ministry of Road Transport, in a circular issued on Tuesday, indicated that the effect of the Covid pandemic in the road sector has been neutralized. “In such an improved scenario, it is noticeable that there is now a tendency in recent bids to submit very low bids for major highway construction as well as consultancy contracts. Since there is no EMD, the bidders offer abnormally low prices for the tender and after winning the tender, they start looking for subcontractors. This trend will negatively impact the quality and timely completion of major road projects,” he said.
The ministry said it had decided to revert to previous bid security arrangements and ordered all implementing agencies to take necessary steps to comply.
On June 28, 2021, TOI reported how the Highways Department’s parliamentary panel flagged concerns about bidders citing abnormally low prices. Panelists had also asked if the industry was flooded with fugitive players.

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