The revival of the competitive intensity .There was one report which i
read way back in 2008 that in a market of perfect information symmetry
the bid difference should not have huge difference in bid amounts
until and unless either of the three things happen
1. Information advantage
2. Incorrect assumptions and calculations
3. Overagressive bidding, the developer willing to compromise on the
returns due to intense competition and a desire to gain market share
It is generally dififcult to say what exactly happend, it might be
just one factor dicatting the decision or a combination of all the
three factors, but 98 prequalifications certainly is a lot, which
essentially goes on to show that that the techincal norms are not so
stringent that only a selected set of players make it through. Though
not all these players would be eligible for the bigger projects of say
above 1000cr but the fact still remains that the entry barriers are
the least, the proejcts strains the balacne sheet if your traffic
projections go wrong.
Pre-qualification is an annual exercise.. I guess that is the reason why the number is high.. If the same state continues, then there would be no takers for few projects over a period of time.. that is when regulators would take necessary action.. this is one possible direction..
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