Large project, but one package: BDA’s risky approach to PRR

The Bangalore Development Authority has taken the risk of tendering the Peripheral Ring Road by turning it into one large contract.

Bengaluru: The Bangalore Development Authority (BDA) has taken the risk of tendering the Peripheral Ring Road (PRR) by turning it into one large contract.

Referring to the Satellite Town Ring Road (STRR) and Outer Ring Road (ORR) where multiple companies were roped in for building the projects, experts believe that a similar approach should be adopted for speedier implementation of the work instead of putting “all the eggs in one basket”. 

As the PRR is estimated to cost Rs 27,000 crore, there is a fear that entrusting one company with the responsibility of handling such a large project could be dangerous. If the company runs into financial difficulties, the entire project – now renamed as Bengaluru Business Corridor – may collapse like a pack of cards, retired officers and road engineering experts say. 

Last month, the BDA floated tenders for the PRR project expecting good response from the bidders. When the authority opened the bids recently, only one firm participated in the bids while large companies including L&T and Dilip Buildcon stayed away. So far, the BDA has floated at least three tenders and the previous two attempts found no response from any bidders. 

Given the magnitude and importance of the project for Bengaluru, experts want the project to be split into multiple packages or tenders, a principle followed by the Namma Metro. Such an approach is expected to increase competitiveness among contractors to complete each segment of the project, 25 km, each for instance, and will also attract fair bidding. 

Along the 73-km alignment, the density of traffic and growth in real estate is high particularly between Tumakuru road and Airport road as well as Hosur road and Old Madras road. 

“It is quite a risk to engage just one company for a project that covers a distance of 73 km,” said Prof Asish Verma of the Indian Institute of Science (IISc).

“If something goes wrong with the company, the whole project will be at stake. It will also be difficult for the company to manage and deliver the project on its own. The best bet is to engage multiple contractors to implement the work,” he said. 

Similar strategy was adopted in 1999 when the BDA built the outer ring road. Six companies were engaged to build the ten lane road. While the land acquisition tool long time, the BDA was able to complete the construction of the project in less than three years. 

The National Highway Authority of India (NHAI), which is building 280-km STRR in the city’s suburbs, plans to engage a total of 10 contractors to take up the project. Similarly, the Karnataka Road Development Corporation (KRDCL), which is widening about 200 km of roads in the city’s outskirts, has engaged more than six firms. 

BDA Chairman N A Haris did not respond to calls.

Lack of competitive bidding

The recent tendering process saw minimal interest with only one firm participating and notable companies like L&T and Dilip Buildcon abstaining. This lack of competitive bidding follows two previous tender attempts that attracted no bidders raising questions about the attractiveness and feasibility of the single-package model.