The Union Road Transport and Highways Ministry has put forth the proposal of mandating highway builders to choose cost-saving value engineering techniques. Value engineering will be assigned as one of the tasks in the Terms of Reference (ToR) for Feasibility Study and Detailed Engineering Projects.

“It has been established that the savings realised 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 Union Ministry read, as reported by ET Infra.

The concerned consultant should cover the potential and project-specific value engineering aspects recognised by the respective domain experts on site reconnaissance surveys in the inception report.

This entire process is considered to be instrumental to sustainably develop the National Highway (NH) network in a cost-effective manner. It is also supposed to bring about enhanced durability along with safety, higher quality and reduction in maintenance.

The notice explains that there is a potential in the current model to let the contractor or the concessionaire adopt the designs and construction methodologies that suit the project requirements. It can also help in reducing the overall cost of the initiative.

However, the concerned parties are reluctant in doing so they fear that the authorities would disagree to alternative technologies or any deviations from the specifications originally laid out in the bid documents.

Further, there isn’t any contractual obligation in NH projects presently that would push contractors to embrace value engineering either. The government is looking to insert this obligation through the aforementioned proposal.

cost reduction measure

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