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The company is Maharashtra-based Patel Engineering. It will be barred for five years from any future tenders.
Patel Engineering had won the contract for designing, building, financing and operating a six-lane highway between Dankuni and Kharagpur on NH-6 in West Bengal. The 11-km stretch was estimated to cost Rs 1,400 crore.
The company, however, decided not to go ahead with the contract citing financial constraints.
According to an NHAI official, the penalty was imposed under the ‘non-performers’ criteria. “There is no provision for a ban in the ‘request for proposal’. It is an internal criterion of NHAI under which the ban has been imposed,” he said on condition of anonymity.
NHAI has also forfeited the Rs 16 crore security deposited by the firm at the time of bidding. It had re-invited bids for the project and awarded it to Ashoka Buildcon.
In the past NHAI has blacklisted many
companies including South Africa’s Intertoll for non-compliance with contractual obligations. It has put companies such as Saudi Arabia’s Sticco, Korea’s You-One Engineering in the non-performer category.
But so far, no company has been barred from bidding for reneging on a won contract. The ban on Patel Engineering will convey a tough message to other firms. A number of small and medium companies are bidding for highway projects.
“There are many new companies that were earlier only into engineering and procurement contracts.
Now they are moving to building and operation of toll projects too. There may be similar cases (of reneging) in future,” he said.
Patel Engineering officials were not available for a comment.
Listed on the Bombay Stock Exchange, Patel Engineering is a small company in the roads and highways construction business. The company had registered a net profit of Rs 7.69 crore in the third quarter of the current year on a revenue of Rs 370.65 crore.
The shares of Patel Engineering were trading at Rs 142.80 on Wednesday, 2.92 per cent above previous day’s close.
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