Highway contracts to face stricter checks as NHAI revises bid provisions

NHAI has tightened bid rules to ensure only experienced contractors qualify, aiming to cut project delays, improve quality of work, and bring down costs in highway development

The National Highways Authority of India (NHAI) has introduced stricter provisions in its Request for Proposal (RFP) framework to ensure that only qualified and experienced contractors take up national highway projects, news agency PTI reported. 

The move, announced on Wednesday, aims to improve execution, reduce delays, and bring down costs in the development of India’s road network. 

  One of the major clarifications issued by NHAI relates to the qualification criteria for bidders. The authority said some contractors have previously misrepresented their experience by presenting minor or peripheral works as evidence of capability to handle large-scale highway projects. 

  “One of the important elements of the provision is clarification of the ‘similar work’ criteria in bid qualification, which has been often misrepresented by contractors to gain eligibility for large-scale highway projects despite having experience only in minor or peripheral works,” the NHAI said. 

  Now, “similar work” will strictly refer to completed highway projects that involve all critical components required for the specific project under bidding, PTI reported.   

 

Restrictions on subcontracting

The revised Request for Proposal (RFP) also aims to curb unauthorised subcontracting practices.  

“Instances have been observed where concessionaires or selected bidders have engaged contractors without the required prior approval of the Authority [NHAI] or exceeded the permissible subcontracting limits,” the authority said.  

  Such practices, it added, compromise quality, delay timelines, and weaken regulatory control. NHAI has now categorised unauthorised subcontracting and exceeding permissible limits as an ‘Undesirable Practice’, making it subject to penalties similar to fraudulent behaviour.

 

Transparency in financial guarantees

Another key reform prohibits the submission of bid and performance securities sourced from third parties. NHAI said that some bidders had furnished guarantees issued by outside entities, raising questions over accountability and enforceability. 

“It has been reported that some selected bidders have furnished financial securities issued by third parties, which undermines the principle of accountability,” the NHAI mentioned. Going forward, only securities backed by bidders themselves or their approved entities will be accepted, ensuring greater financial transparency.   

 

Stricter SOPs for tunnel projects

Earlier this month, the Ministry of Road Transport and Highways (MoRTH) introduced new standard operating procedures (SOPs) for tunnel projects to cut costs and limit environmental damage. Each project must now evaluate at least three alignment alternatives before final approval:

• Covering the shortest route,

• Geologically suitable paths,

• Options with minimal social disruption.

 

The guidelines stress avoiding eco-sensitive zones, heritage sites, steep slopes, fault lines and urban settlements. The SOPs follow the November 2023 Silkyara tunnel collapse in Uttarakhand, which prompted a review of ongoing projects. 

The ministry said that tunnels are vital for border connectivity, tourism, socio-economic integration, and national security. However, it cautioned that tunnel planning is inherently complex, requiring multidisciplinary studies to avoid cost overruns, delays and disputes.