Competition for construction projects to intensify due to bidding from sub-contractors

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Third, of the 160 pure construction projects awarded by the National Highways Authority of India (NHAI) in the past three years, 69% were awarded at a discount to the base price of projects.

Synopsis

A key aspect to note is that only pure construction or non-hybrid annuity model (HAM) projects are likely to see intense competition. Pure construction projects refers to projects where the government bears the complete cost of a project while in HAM projects, the government bears 40% of a project’s cost and the company bears the remaining cost.

ET Intelligence Group: India’s construction industry is likely to see increased competition in this financial year as more bidders enter the segment. The range of bidders is likely to go up to eight to 15 this fiscal from four to 10 in the past three years, said a study by rating agency ICRA. Competition is likely to intensify in the construction segment owing to a few reasons. First, sub-contractors who have been working for established players

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