India Tightens Highway Project Bid Rules For Quality Timely Delivery
India’s Roads Ministry has significantly tightened eligibility criteria for bidding on highway projects, a strategic move aimed at ensuring higher construction quality and timely completion. This initiative seeks to prevent pervasive delays and cost overruns that have plagued major road infrastructure developments, fostering more reliable and sustainable connectivity across the nation.
The Ministry of Road Transport and Highways has issued a circular detailing modifications to bidding rules for Hybrid Annuity Model (HAM) and Engineering, Construction, and Procurement (EPC) projects. These include raising the minimum financial requirement for bidders, introducing stricter checks on sub-contracting experience, and redefining “highways” and “core sector” to enhance project accountability.
Under the revised HAM criteria, the financial capacity threshold for bidders has been increased to 20% of the estimated project cost from the previous 15%. For consortium bids, the net worth requirement for each member has been raised to 10% from 7.5%. Similarly, for EPC projects, the minimum net worth for bidders is now 10% (up from 5%), and the average annual turnover requirement has increased to 20% (from 15%) of the estimated project cost. Industry executives anticipate this will attract larger, more financially robust companies.
These changes come as the government plans to award approximately 124 road projects in 2025-26, valued at an estimated ₹3.5 lakh crore, with over 80 projects slated under HAM. The tighter regulations are a direct response to a high incidence of project delays; data indicates 55% of HAM projects awarded between 2015 and 2024 were delayed beyond six months. Union road transport officials noted that 44% of road projects under construction in March 2024 faced delays, primarily due to financial shortfalls and clearance issues.
By enforcing stricter financial and experiential criteria, the ministry aims to foster a more robust and dependable road construction sector. This ensures efficient public investment and the timely delivery of critical infrastructure, vital for a sustainable and equitable urban and rural future.
