NBCC vs CPWD: How government construction is seeing a quiet shift

NBCC's project portfolio has grown far larger than CPWD's, reflecting a quiet shift in how the Centre is executing office, housing and infrastructure projects

A small but noticeable shift is happening in the league of government-run construction entities in India. From the Central Public Works Department or CPWD, as the central government’s automatic choice for construction projects, the mantle is shifting to NBCC Ltd, erstwhile National Buildings Construction Corporation.

 

Both entities operate under the Ministry of Housing and Urban Affairs. As of March 2025, the total projects operated by CPWD were about ₹25,000 crore; those by NBCC are far larger at ₹1,20,533 crore, according to their own published data.

 

The changes are hugely significant when infrastructure construction has become one of the central government's key result areas. While specialised agencies exist for non-governmental projects, CPWD has been the agency for government buildings, including many embassies abroad. By the agency’s own reckoning, it has grown cumulatively at 13.26 per cent in the past five years, since the pandemic.

 

But NBCC has become the key participant in most of the construction-reliant flagship schemes of the government, including the new office blocks dotting South Delhi, like the several General Pool Office Accommodations, where every regulator is now housed, the residential enclaves for government employees, including the gated enclave with the dome-capped bungalows for the secretary-level officers at New Moti Bagh.

 

It has already made its mark as the preferred agency to execute many of the Smart Cities Mission projects, parts of the NamamiGange, parts of the Pradhan Mantri Gram Sadak Yojana, and even Defence projects, once only handled by the CPWD.

 

The scale of change is also reflected in the performance measures of the two agencies. NBCC has just about 1,169 employees (March 2025) against the massive 18,000 that CPWD employs. The large workforce is needed by the latter to service the myriad government offices, mostly in Delhi. But these are becoming vestigial as the face of government offices in the city changes. A critical shortage is developing for engineers. More experts are manning the horticulture department (gardens) than are available to build towers, according to its own notes.

 

This is reflected in the split between the two agencies in developing and maintaining the rows of Kartavya Bhawans. Several agencies have executed the project, but there is no denying the upper hand that the listed NBCC enjoys.

 

The change is also surprising because NBCC was created as a project management consultancy organisation to serve clients beyond the government. Even now, the company’s website claims it is these services, which account for 92 per cent of the company's total revenue, that primarily involve overseeing the implementation of engineering projects from their conceptualisation to commissioning.

 

CPWD was born from the Public Works Department, formally established in 1854 when Lord Dalhousie was the Governor General of British-ruled India. The construction of New Delhi became a major reason for the expansion of the department. CPWD came into existence on 1st April, 1930, to look after the vast office and residential campus of the Central Secretariat and allied Offices that sprang up in Delhi. These included the Secretariat and the Rashtrapati Bhawan. For 170 years, CPWD has remained the construction agency of choice for successive governments.

 

It has not been a one-way street, however. CPWD has begun to spread out to the state capitals. In June, the Union Cabinet approved the construction of the General Pool Residential Accommodation at the New Capital City, Amaravati, Andhra Pradesh. This marks the first GPRA project in the capital city of Amaravati, as well as within the state of Andhra Pradesh, at an estimated cost of ₹1,234.91 crores.

 

The project is significant because, at the state level, there are public works departments. Under the Indian Constitution, building works are divided into three branches, namely (i) Buildings and Roads, (ii) Irrigation, and (iii) Public Health Engineering. Each of these comes within the purview of the state governments. The CPWD is making inroads in these areas.

 

One of the reasons why CPWD has been slower compared to other organisations is the administrative layout of the organisation. CPWD is not structured as a commercial entity but as a government department. Each branch of the entity is run by a Chief Engineer. Each of the branches is generally subdivided into Circles, which are in the charge of Superintending Engineers. These circles are further subdivided into Divisions under the charge of Executive Engineers (also called Divisional Officers) and then subdivisions. Both at the Centre and at the states, this makes the agency an ideal support for the Government to plan, construct and maintain all works and buildings, financed from the government budget.

 

A huge reason for the shift in fortunes is this administrative architecture. A building project today needs to be completed financially before a single barrel of mortar is poured into the site. The administrative structure of CPWD does not lend itself to any flexibility in its financial operations, since it depends on the government ledger at every stage. NBCC, as a listed company, has the financial wherewithal to set up an SPV; a government department like CPWD cannot. As a result, not only are new towers coming up in Delhi, but their builders are also changing.