Centre relaxes payment mechanism for govt-funded highway contracts

Contractors to be given funds every month

The Centre has relaxed the payment mechanism for engineering, procurement, and construction (EPC) or government-funded highway contracts to provide more liquidity in the hands of contractors.

Contractors will now be given funds every month, rather than on the basis of the milestone achieved. While the amount will still be based on work completed, the method of providing periodic payment ensures ready cash.

The Ministry of Road Transport and Highways has asked the National Highways Authority of India (NHAI) and various state governments to adopt the new payment model. This decision comes in response to demands made by construction firms, which