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India Sets Stricter Rules For Highway Project Bids To Improve Quality

The Ministry of Roads has implemented significantly stricter qualification requirements for companies bidding on highway projects. These enhanced criteria, applicable to both Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) modes, are designed to ensure superior construction quality and timely completion of critical expressways and national highways. This strategic overhaul reflects a firm commitment to building sustainable, eco-friendly, and equitable urban environments, where robust infrastructure is paramount for seamless connectivity and economic vitality.

The impetus for these revised guidelines stems from a candid acknowledgment of past challenges. Data reveals that a substantial number of highway projects have faced considerable delays, often attributed to the participation of contractors lacking sufficient financial muscle or operational capacity. For instance, an analysis by CareEdge Ratings indicated that 55% of 374 HAM projects awarded between 2015 and 2024 experienced delays exceeding six months. Furthermore, as of March 2024, nearly 44% of 952 ongoing road projects were behind schedule dueating to various constraints, including financial limitations and clearance bottlenecks. The new norms are a direct response to these inefficiencies, aiming to filter out less capable entities and attract larger, more experienced players with deep pockets.

Under the updated framework, financial prerequisites for bidders have been substantially elevated. For HAM projects, the required financial capacity has increased from 15% to 20% of the estimated project cost, while consortium members must now demonstrate a net worth of 10%, up from 7.5%. Similarly, for EPC projects, bidder net worth requirements have doubled to 10%, and annual turnover prerequisites have been raised to 20% of the estimated project cost. These stringent financial thresholds are expected to ensure that only well-resourced companies, capable of delivering high-quality construction within stipulated timelines, are awarded these crucial contracts.

Beyond financial adjustments, the Ministry has also refined the classification of infrastructure projects. Railways, metro rail, and ports, which were previously grouped under the broader highway definition, are now distinctly categorised as “core sector” projects. This redefinition is poised to streamline project allocation by ensuring that specialised expertise is matched with specific infrastructure needs, fostering greater efficiency and accountability across different transport modalities. Such clarity in classification is vital for integrated urban planning, promoting a holistic approach to city development that supports gender-neutral and accessible public services.

As the government prepares to allocate 124 road projects worth an estimated ₹3.5 lakh crore for 2025-26, with over 80 projects under the HAM model, these stricter rules mark a pivotal moment for India’s infrastructure landscape. The emphasis on quality and timely execution is not merely an administrative adjustment; it is a strategic investment in the nation’s future, promising a more reliable, efficient, and environmentally conscious transport network that will serve as a bedrock for sustainable economic growth and enhanced urban living.

Also Read :India To Upgrade 25000 Km Highways Into Four-Lane Green Mobility Corridors

India Sets Stricter Rules For Highway Project Bids To Improve Quality
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