Introduction

The 1st Amendment to the Policy on limits for construction projects awarded through National Tender (Guideline No: 2023/G-1) came into force on 11th January 2023. This amendment has been brought into effect to include a project funded under the cross-subsidy regulation as an exception to the framework outlined in the Policy on limits for construction projects awarded
through National Tender.

Policy on limits for construction projects awarded through National Tender

The Government published the Policy on establishing limits in awarding construction projects under National Tender (Policy No: 2022/G-18) (“Policy on limits for construction projects
awarded through National Tender”) on 12th June 2022. This policy repeals the previous policy published on 16th March 2021. The main outcome of the policy is to limit the number of projects awarded to a single party in a budget cycle.

The policy aims to:

• foster wider participation and offer projects to a wide group of contractors; and
• incentivize successful bidders to complete ongoing projects on time in order to be considered for future projects.

Procurement projects

• Parties participating in the bidding process must be registered under the Construction Contractors Regulation (Reg No: 2019/R-1019). If the party is foreign or part of a joint venture, they can only participate if they have documentary proof that they fulfill the criteria of their relevant category under this regulation.
• below are the types of projects:
  » GC01: General building construction (companies with government shares cannot participate in the bidding process for this type)
  » GC02: General civil construction
  » HC01: Harbour construction
  » HC02: Reclamation and dredging
  » HC03: Conservation of shores
  » UC01: Water and sewerage
  » UC02: Electricity
  » UC04: Gas
• Only companies registered under levels 1 - 6 of Construction Contractors Regulation will be awarded GC projects.
• Only companies registered under levels 1 – 4 of Construction Contractors Regulation will be awarded HC and UC projects.

Calculating limits

• The table below shows limits imposed on awarding projects to a single party through National Tender.

Level	UC/HC (Section 1)		GC (Section 2)
	Total Value	Total number	Total Value	Total number
1	Up to MVR 500 million	15	Up to MVR 1 billion	20
2	Up to MVR 400 million	12	Up to MVR 500 million	15
3	Up to MVR 350 million	10	Up to MVR 300 million	10
4	Up to MVR 200 million	6	Up to MVR 200 million	8
5			Up to MVR 100 million	6
6			Up to MVR 50 million	5

• There are certain exceptions which can be awarded without limitation above and beyond the totals mentioned above. These exceptions are detailed below under the heading ‘Exceptions’. However, projects that fall within the exempted class including such project(s)’ value will be considered in calculating a party’s total where such party is considered for a project that is not exempted. Projects which have been terminated or completed shall not be counted.
• Where joint ventures or conglomerates are concerned, all entities that fall within the control of such joint ventures of conglomerates will be considered a single party. Such effect shall apply vice versa ie. when a joint venture or conglomerate is awarded a project, such project’s value will be considered in the individual entity’s tally as well. 

Exceptions

The following projects can be awarded above and beyond the limits imposed by this policy.

• Contractor finance or deferred payment projects
• Procurements projects that are financed with loan/grant money, and said loan/grant comes with procurement terms
• Procurement projects that are financed with loan/grant money, and said loan/grant money is conditional on the project being awarded to particular contractors
• Projects awarded under section 10.27 of the Public Finance Regulation (Reg No: 2017/ R-20)
• State welfare projects funded under cross-subsidy principle* 

Amendment* 

State welfare projects funded under the cross-subsidy principle are now to be counted as an exception as above. This amendment is a move to encompass the Cross Subsidy Regulation (Reg No: 2022/R-125) which came into effect later than this policy.