Revising policy, MES sharply raises limit for joint ventures in construction work

Vijay Mohan

Chandigarh, April 9

The Military Engineer Service (MES) has revised its policy pertaining to joint ventures in the execution of civil works. Under new guidelines, joint ventures would be permitted only for works that are estimated to cost more than Rs 100 crore.

Heretofore, joint ventures were permitted for specialist services estimated to cost above Rs 20 crore and other works above Rs 50 crore in addition to solar power projects and pre-engineered structural works of any value.

The revised policy will be applicable in all tenders for which the bid submission end date is on and after April 13, 2022, according to a communiqué issued on April 7 by the Engineer-in-Chief’s Branch at Army Headquarters.

Among the largest construction and maintenance agencies in India with an annual budget of Rs 13,000 crore, MES is responsible for creating strategic and operational infrastructure across the country for the armed forces such as airfields, ports, residential and office accommodation, specialist facilities, hospitals and workshops.

Staffed by a mixed component of army and civilian cadres, it is one of the pillars of the Corps of Engineers alongside the Combat Engineers and the Border Roads Organisation.

Given the specialist nature of work or to mitigate manpower shortages and meet other technical or administrative requirements, some of the projects are outsourced by the MES to commercial firms, which may execute them as a single entity or in collaboration with an industrial partner.

The policy also reiterates that foreign companies will not be permitted to participate in joint ventures. Indian companies having directors of foreign origin and Indian companies having directors of Indian origin but residing abroad or having foreign citizenship, however, can be permitted to form joint ventures subject to requisite security clearance.

A joint venture cannot comprise more than two firms. The lead firm shall have at least 60 per cent share in the venture while the second firm shall have at least 30 per cent share, which has to be clearly defined along with the role, responsibility and scope of work of each firm.