Post-tender changes to NHAI pacts benefited road builders: CAG

The Comptroller and Auditor General (CAG) of India has flagged undue benefit to road builders through post-tender amendments to agreements signed with the National Highways Authority of India (NHAI).

The auditor said the NHAI granted deferment of premium amounting to ₹9,296.25 crore for eight years to 14 years for 20 projects till October 2019. This deferment was on the basis of a scheme formulated by the NHAI after it assessed a revenue loss of ₹98,115 crore to the exchequer if the projects were terminated.

“The scheme was formulated on the basis of flawed presumptions,” said the CAG.
It said 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).
“Any post tender/ contract amendment tantamounts to vitiating the entire tendering process, against the principle of sanctity of contracts and unfair with respect to other bidders,” said the CAG report on Rationalisation/Deferment of Premium in BOT Projects in NHAI tabled in Parliament on Thursday.
It said the scheme that paved way for this deferment was formulated by the NHAI despite availability of alternatives within the ambit of signed concession agreements.

Raising compliance issues, the CAG said that the policy or scheme for rationalisation of premium was neither considered nor approved in the NHAI board meeting. Further, it said, the transport ministry failed to adhere to guidelines of the cabinet secretariat for circulation and approval of cabinet notes.
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