Centre Contemplates Threshold Price Of Rs 5 Lakh Per Km To Improve Quality Of DPR Preparation Contracts In Road Projects

The government intends to establish a threshold of Rs 5 lakh per kilometre to award contracts for preparations of the detailed project report (DPR) for road projects.

This represents a notable escalation from the current average of Rs 1 lakh per kilometre, and comes in the wake of a transition from the least-cost to a fixed-cost model, reports the Economic Times.

Currently, bidders quote a bare minimum price to get the contract but eventually make poor quality DPRs which leads to modification in the scope of work, variation, time, and cost overrun, eventually delaying the whole project.

Consequently, the government has proposed a minimum price threshold for contract awards, which will improve the quality of DPRs and bring them on par with international standards, ultimately aiming to prevent project delays.

In fact, Road Transport Minister Nitin Gadkari has repeatedly expressed concern over the poor quality of DPRs prepared by Indian companies, saying these below-standard reports cause project delays and road accidents.

The Ministry of Road Transport and Highways (MoRTH) has initiated a process to gather feedback from stakeholders regarding these proposed changes and is expected to finalise new rules for DPRs soon.

The proposed minimum price has been determined by considering global norms related to the salaries of skilled personnel and other relevant factors.

Although a final decision is pending, the government anticipates that setting a threshold will incentivise the submission of high-quality DPRs.

While acknowledging that a fivefold increase in DPR costs would impose an additional financial burden, the government is optimistic that the benefits derived from improved DPR quality and resultant savings will outweigh these costs in the long run.