The Road transport ministry has proposed mandating highway builders to opt for cost saving value engineering techniques.
“It has been established that the savings realized by undertaking value engineering exercises can be in the order of 10-15 per cent of the cost of the originally designed project,” a notice from the transport ministry said while citing a World Bank report on the Indian Road Construction Industry.
It is being proposed that value engineering shall be assigned as one of the task in the Terms of Reference (ToR) for Feasibility Study and Detailed Engineering Projects. In Inception Report itself there shall be a Chapter regarding Value Engineering, in which Consultant shall include the potential and project specific value engineering aspects identified by the respective domain experts based on site reconnaissance surveys.
The transport ministry noted that a need is increasingly being felt to adopt value engineering practices in design, construction and maintenance with regards to use of materials and technology. This is being considered as a vital step to meet the sustainable development of the National Highway (NH) network in a cost effective manner. It will also lead to improved durability and safety, higher quality and a reduction in maintenance.
According to the notice, the existing models under which highway development projects are bid out have the potential that the Contractor or the Concessionaire to adopt designs and construction methodologies to suit the requirements of the project and also bring down the cost.
But despite the facilitative provision for value engineering, contractors or concessionaires, out of an apprehension that the authorities would take adverse views about any alternative technologies, avoid any deviations from the specifications/technologies sought for in the bid documents.
Further, presently there are no prevailing contractual facilitation for value engineering in NH contracts which would compel the contractor to adopt value engineering.
In November 2020, the Finance Ministry had issued guidelines that removed the additional performance security to be taken from bidders the contracts in the business-as-usual scenario. This was done to support highway developers during the COVID-19 pandemic.
The PM GatiShakti plan was announced last year with an aim to break departmental silos and bring in more holistic and integrated planning and execution of projects with a view to addressing the issues of multi-modal and last-mile connectivities. This will help bring down the logistics cost and promote effective and efficient planning of infrastructure projects.