The Ministry of Rhodes has tightened the eligibility criteria for bidding for road projects under the Hybrid Anuity Model (HAM) and Engineering, Construction and Procurement (EPC) mode, which aims to ensure good quality construction for highways and expressways and to complete the time and cost to avoid projects.
To increase the minimum financial requirement for bidders in amendments, both standard highway projects as well as tunnels, etc. for special projects such as tunnels, etc., offer more and more checks on the amendment of sub-pronouncement experience and the definitions of highways and core sectors, a circular issued by the Ministry of Road Transport and Highways.
ET has prepared a framework for changes in eligibility criteria for Ham and EPC projects.
Changes come at a time when the government plans to reward some 124 road projects in 2025-26, which is at an estimated cost of 3.5 lakh crores, with more than 80 projects under HAM.
Under the revised criteria for HAM projects, the threshold financial capacity for bidders has been increased by 20 percent of the estimated project cost to 15 percent, while the requirement of net value for each member bidding through a consortium has increased by 10 percent of the estimated project cost from 7.5 percent.
“It will ensure large companies with deep pockets for projects and provide quality construction within the stipulated time,” said an executive officer of the industry.
For EPC projects, the minimum net property of the bidder required for bid has been increased from 5 percent to 10 percent, while the requirement for average annual turnover has increased from 15 percent to 20 percent of the estimated project cost.
In addition, the revised definition of highways no longer includes railway, metro rail and port, which have been taken to the main area for Ham and EPC projects.
In the past, the government had reduced the requirement of financial limits for companies in the highway and core construction sector to allow even small players to take projects.
But over the years, the project has been highly delayed by the project in the roads, resulting in overron, mainly due to lack of financial pause and expected approval, inspired the government to resume the eligibility criteria.
Careedge rating data shows that 55 percent of the 374 HAM projects provided between 2015 and 2024 have been delayed by more than six months.
In December 2024, Union Road Transport Minister Nitin Gadkari said in Parliament that in March 2024, out of 952 road projects under construction, 44 percent or 419 were delayed due to various reasons.
