**Policy Summary: Enhanced Quality Assurance for National Highway Projects**
The Ministry of Road Transport and Highways, through the National Highways Authority of India (NHAI), has issued clarifications to the Request for Proposal (RFP) provisions to enhance the quality, timeliness, and lifecycle cost-effectiveness of National Highway projects. These changes, effective September 17, 2025, focus on strengthening contractor qualification norms, enforcing compliance during project execution, and improving financial transparency.
Key changes include:
* **Refined "Similar Work" Criteria:** The definition of "Similar Work" for bid qualification now exclusively refers to completed highway projects with major components comparable to the project for which the bid is invited, preventing contractors with experience only in minor works from qualifying for large-scale projects.
* **Regulation of Subcontracting:** Unauthorized engagement of EPC contractors in HAM/BOT/Toll projects and subcontractors exceeding permissible limits in EPC projects will be classified as "Undesirable Practice," attracting penalties similar to fraudulent practices. Prior approval from the Authority is mandatory for subcontracting, ensuring quality assurance and regulatory oversight.
* **Prohibition of Third-Party Securities:** The submission of Bid and Performance Securities from third parties is disallowed. Only securities backed by the bidder or its approved entities will be accepted, enhancing financial transparency and enforceability of contractual obligations.
These measures aim to award projects to technically and financially competent contractors, ensure execution by authorized entities, and improve regulatory oversight. The expected outcomes include better infrastructure quality, timely project completion, and optimal use of public resources.
Key Entities Referenced
Ministry of Road Transport Highways: The Indian government ministry responsible for the development and maintenance of the country's road infrastructure.
NHAI: National Highways Authority of India, the agency responsible for the development, maintenance and management of National Highways in India.
RFP: Request for Proposal, a document that solicits proposals from potential contractors for National Highway projects.
National Highway Projects: Infrastructure development projects focused on building and improving the National Highway network in India.
"Similar Work" criteria: A criterion used in bid qualification to assess contractors' experience with projects comparable to the one for which the bid is being invited.
EPC contractors: Engineering, Procurement, and Construction contractors, responsible for executing projects based on a fixed price contract.
HAM: Hybrid Annuity Mode, a model for infrastructure development where the government provides a portion of the project cost upfront and the remaining is paid over a period.
BOT Toll projects: Build-Operate-Transfer Toll projects, a public-private partnership model where a private company builds, operates, and collects tolls on a project for a specified period before transferring it to the government.
Ministry of Road Transport & Highways
NHAl Tightens RFP Provisions to Enhance Quality of
National Highway Projects
Posted On: 17 SEP 2025 2:48PM by PIB Delhi
In order to improve the quality of project execution, reduce delays, and bring down the overall lifecycle cost
of the National Highway projects, NHAI issued clarifications to provisions of RFP that are aimed at
strengthening contractor qualification norms, enforcing compliance in project execution, and enhancing
transparency in financial submissions.
Stringent conditions in various clauses under the RFP will help to ensure that only technically
capable and experienced contractors qualify for the implementation of National 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 that do not reflect the
complexity and scale of full-fledged highway development. NHAI has now clarified that "Similar
Work" shall refer exclusively to completed highway projects that include all major components
comparable to those required for the project for which the bid has been invited.
In addition to refining the qualification criteria, the clarifications to RFP also seek to address the unauthorized
engagement of EPC contractors in HAM & BOT (Toll) projects and subcontractors in EPC projects. Instances
have been observed where concessionaires or selected bidders have engaged contractors without the required
prior approval of the Authority or exceeded the permissible subcontracting limits.
Such practices not only violate contractual norms but also pose risks to quality assurance, project timelines,
and regulatory oversight. Any unauthorized sub-contracting and subcontracting beyond permissible limits
will be classified as "Undesirable Practice," thereby attracting penalties on par with fraudulent practices. This
move will help to reinforce discipline in contract execution and safeguarding the integrity of the
implementation process.
Another major component of the reform involves prohibiting the submission of “Bid and Performance
Securities” that are sourced from third parties. It has been reported that some selected bidders have furnished
financial securities issued by third parties, which undermines the principle of accountability and raises
concerns regarding enforceability and bidder liability. Now, it has been clarified to disallow such third party-
sourced instruments, ensuring that only securities backed by the bidder or its approved entities are accepted.
The step is expected to enhance financial transparency and improve the enforceability of contractual
obligations.
The above cited clarifications to RFP will help to ensure that National Highway projects are awarded to
contractors with proven technical and financial competence, executed by authorized and accountable entities,
and monitored with greater regulatory oversight. These measures will facilitate delivering better infrastructure
quality, timely completion of projects, and optimal use of public resources-thereby contributing to the
development of more efficient National Highway network.
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SR/GDH/SB
(Release ID: 2167542)