Mandatory - Cost Cutting Techniques for Highway Builders.

  • By Admin
  • 28-08-2023

The Ministry of Road Transport has recommended requiring highway builders to use cost-cutting value engineering approaches.

According to a notification from the transport ministry, "it has been shown that value engineering operations can save in the order of 10-15% of the cost of the originally proposed project, citing a World Bank report on the Indian road construction industry.

It is proposed that value engineering be included as one of the tasks in the Feasibility Study and Detailed Engineering Projects Terms of Reference (ToR).

There will be a chapter on Value Engineering in the Inception Report itself, in which the Consultant will incorporate the potential and project-specific value engineering issues identified by the various subject experts based on-site reconnaissance surveys.

In terms of materials and technology, the transport ministry stated that there is a growing need to apply value engineering principles in design, building, and maintenance.

This is seen as a critical step toward the cost-effective and long-term development of the National Highway (NH) network. It will also contribute to increased durability and safety, as well as superior quality, and lower maintenance costs.

The existing models for bidding out highway development projects have the ability for the Contractor or Concessionaire to adapt designs and construction methodologies to meet the project's needs while also lowering costs.

Despite the possibility for value engineering, contractors and concessionaires avoid any deviations from the specifications/technology required in the bid documents for fear of the government taking a negative view of any alternative technologies.

Furthermore, there are currently no contractual provisions in place in NH contracts that would oblige the contractor to use value engineering.