PM Urged to have relook and revisit age old Least cost selection method for complex infra consultancy projects

Eminent infrastructure consultancy expert  in a letter to the Prime Minister Narendra Modi has urged him to revisit the age old existing tendering system in the country based on the Least Cost Selection Method or L1 as it may not be the most appropriate and suitable method of awarding a Contract for various infrastructure projects in the country.

“In India Complex Projects like expressways, tunnels, power plants which require global state of the art technology need be awarded on Quality and cost Based Selection (QCBS) instead of least cost procurement method for works, goods and consultancy. It should be at lowest workable rates.”  Said Mr K K Kapila, former Chairman, Consulting Engineers Association (CEAI) and President Emeritus, International Road Federation in a letter to Prime Minister Narendra Modi .

“Consultancy Assignments for Typical high end infrastructure projects  must be procured at QCBS 90:10 basis (Technical Weightage 90% and Financial Weightage10%); and Procurement for all other consultancy assignments must always be on QCBS 80:20 basis (Technical Weightage 80% and Financial Weightage 20%).” Said Mr Kapila.

“For all such projects, the Standard Deviation method should be applied to remove abnormally low rates – which is the ill of all problems .For Atamnirbhar Bharat vision the government should award any project, however complex it may be  to a Joint Venture of an Indian Company and an International Company, with the Indian Firm bringing the local knowledge and financial strength to the Consortium, and the international firm, the technical knowhow; In all Consultancy assignments requiring an International company, minimum 40 % key staff must be provided by the Indian Company besides all logistics like office facilities, operations, vehicles and local administration .”Said Mr Kapila.

 ”The essential Condition for the International Company should be to transfer specialized knowledge / technology to the Indian Partner through limited specialized input; and, The payment to the foreign partner to be linked with Transfer of Technology “said Mr Kapila.

“The government should redefine the definition of a company in India which is currently being misused by the international companies and a major hindrance in the country becoming ‘Atamnirbhar’ .Presently Any company currently registered in India and paying taxes here is considered an Indian company. As brought out earlier the definition of an Indian Company must necessarily be a Company registered in India with at least 60% ownership by Indian Nationals and 40 per cent key staff to be provided by the Indian partner  besides all logistics like office facilities, operations, vehicles and  local administration “ said Mr Kapila.