Centre overhauls highways construction bid process, timelines set for pre-bid clearances

These milestones will be applicable for highway building and awarding agencies including the National Highways Authority of India (NHAI), NHIDCL (National, Highways and Infrastructure Development Corporation Ltd) and the ministry of road transport and highways (MoRTH's) own road construction wing.

They reflect specific timelines for taking various statutory clearances before awarding any highway project. 

Beyond land norms

Notably, the timeline goes well beyond the need to acquire 90% of land before inviting bids -- a practice that has been followed for highway awards for the past few years.

Also read: Independence Day: Toll relief, annual pass for pvt vehicles on highways from 15 Aug

Now, the ministry has mandated that work on securing forest, environment and wildlife clearances should begin on approval of a highway alignment and the process has to be completed before bids are received.

This assumes importance given that the Centre plans to award around 9,000 km of highways in FY26, with the pre-bid exercise seen as important to prevent contractual disputes, and time and cost overruns.

According to a MoRTH circular issued to all highway development and awarding agencies, specific timelines would have to be followed even for securing clearance from Indian Railways and Inland Waterways Authority of India and also for finalising certain estimates before bids are invited.    

“Delays and disputes often stem from awarding projects before land acquisition and clearances are substantially completed. When contractors face site access issues, legal hold-ups, or pending compensation, it stalls progress from day one.

Synchronizing project awards with land readiness and statutory clearances isn’t just good practice, it’s a game-changer. It allows contractors to mobilize immediately, reduces redesigns, and brings greater cost control and timeline certainty," said Shailesh Agarwal, partner, risk consulting (infrastructure), EY India.

“For alignment to take root, clear intent must be supported by consistent execution. A centralised digital platform to track clearance progress, field-level empowerment to address last-mile issues, and the appointment of independent readiness verification agencies can ensure projects are awarded only when truly execution-ready," he added. 

Land acquisition milestones

With respect to land acquisition itself, the MoRTH circular said that the process will begin 60 days after a highway's alignment is finalised, and notification regarding land acquisition is to be issued before receipt of bids. Also, 90% of right of way (RoW) length should be awarded before a letter of award (LoA) is issued. 

RoW refers to the land required for building a highway.

Also read: Centre asks for measurable socio-economic benefits reports from highway development

In addition, timelines have also been provided for acquiring land to construct approach road to a highway project.

Accordingly, MoRTH has now decided that possession of 100% of RoW length should be available in an approach stretch of up to 1 km on either side of a standalone bridge or road over bridge project on or before issue of LoA. Also, possession of 100% of the ROW length has to be made available in an approach stretch of upto 1 km on either side of any project with a tunnel on or before issue of LoA.

“Assessment of value and payment for structures should be considered as an integral part of the compensation payment on land acquisition for the purpose of the above milestones," the MoRTH circular said. 

PadmaPriya, Partner, Grant Thornton Bharat, said, “Disputes frequently arise when projects are awarded before obtaining critical clearances such as land acquisition, environmental, forest, wildlife approvals, railways, archaeological survey etc.

Contractors face delays in mobilization and execution due to inaccessible project sites or regulatory restrictions, leading to claims for time and cost overruns. These unresolved issues can strain government-contractor relationships, invite arbitration or litigation, and ultimately slow down the speed of infrastructure delivery."

“However, the recent initiatives taken by MoRTH are very promising to overcome the hindrances occurring in providing unencumbered project sites to the contractors. If these initiatives are adopted with the fullest of their spirit, they may resolve upto 90% of such cases where the government faces delays and cost overruns," she added. 

While highway projects are very complex in nature, synchronizing the award of projects with the completion of statutory milestones ensures that projects are “shovel-ready" at the time of award. This reduces uncertainty and prevents post-award delays. 

“Adherence to these timelines brings predictability, enables smooth contractor mobilization, and minimizes the scope for contractual disputes, thereby improving cost control and accelerating project completion," Padma Priya said.

The government has already implemented various initiatives such as the Bhoomi Rashi portal for ensuring that compensation is given for land acquisition on a real-time basis and Parivesh Portal, a single window system for obtaining all type of approvals.

“While milestone-based synchronization is a significant step forward, challenges still remain in terms of inter-departmental coordination, procedural bottlenecks, and real-time tracking of clearance statuses. Leveraging digital tools for transparency, creating single-window systems for approvals, and decentralizing certain decision-making powers can enhance efficiency," Padma Priya said. 

Also read: India plans to offer grants, ease regulatory norms for rare earth processing amid China supply woes