NHAI Tightens Norms for Highway Project Contractors
The National Highways Authority of India (NHAI) has implemented stricter regulations for contractors involved in highway projects. This initiative aims to curb unauthorized subcontracting and identify firms falsifying credentials to secure projects beyond their expertise.
Key Points
- Unauthorized Subcontracting:
- Instances of concessionaires or bidders engaging contractors without NHAI's prior approval or exceeding permitted subcontracting limits have been observed.
- Such practices are now classified as an ‘undesirable practice’ and carry penalties equivalent to fraudulent practices.
- Clarifications in RFP:
- Part of several clarifications issued by NHAI in the request for proposal (RFP) for contractors.
- Address concerns raised by the parliamentary public accounts committee (PAC) about “unchecked layering” of contractors and subcontractors.
- Disclosure Norms for Experience:
- Contractors must now prove experience in completed highway projects that include major components comparable to the current project.
- Third-party Financial Securities:
- Bidders are now prohibited from submitting financial securities issued by third parties.
- Only securities backed by the bidder or its approved entities will be accepted to enhance financial transparency.
Background and Impact
Post-Covid-19, the highway sector experienced increased competition due to eased entry barriers during the lockdown. These clarifications will ensure that national highway projects are awarded to contractors with proven technical and financial competence and that projects are executed by authorized and accountable entities with improved regulatory oversight.
