Heated debate in Assembly on 'Swiss Challenge': Here is all you need to know about it

The debate on the Swiss Challenge in the state assembly on Tuesday has raised many questions about the concept of the Swiss Challenge. However, it is not a difficult one to grasp the intention behind the ideology. It is nothing but a method of bidding

usually used in public projects. Unlike in general bidding process, in the Swiss Challenge, interested party initiates an amount for a contract from the government. Then the government puts the details of the project available to the public and invites proposals from others bidders.

While if the latter's proposal is lower, the first bidder will get an opportunity to match the best bid and if the original contractor comes up with a further lower bid, then he would have the right to acquire the project. Otherwise, the second bidder is declared as the winner.

In simple, assume that Company X quotes a price of Rs 10,000 crore for an irrigation project. Then it will be made public, and invites the second set of bids. While the second one let's say company Y quotes Rs. 9000 crore, then Company X will be offered a second chance to match the bid. If it refuses, Company Y would be declared the winning bidder. If Company X steps up and quotes another price, it will bag the project for Rs. 9000 crore.

Earlier, the Swiss Challenge system is used to develop Mega Film City Venture by the Jaipur Development Authority and in 2017 Indian Railways adopted the method for inviting tenders for renovation works of 23 railway stations.

The Andhra Pradesh proposed this method to allot bids for setting up start-up areas in Amaravati in 2016. However, the High Court issued stay on the Swiss Challenge and off late the court has ordered the new govt to submit an affidavit on the issue last October.