In order to move away from the trend of receiving abnormally low bids for national highway projects, the Ministry of Road Transport and Highways (MoRTH) has now imposed additional security performance on bidders of road projects for bids lower than the estimated cost of the project.
As per the circular released, additional security performance will be 0.1 per cent for every percentage of bid price below 10 per cent of the project cost in case the bid price is below 10 per cent but not less than 20 per cent, and this will be applied on the bid price. The additional performance guarantee percentage will be increased by 0.2 per cent for each percentage of the bid price in addition to one per cent of the bid price if the bid price is 20 per cent or more than the project cost.
The latest circular, dated April 30, 2025, will replace the 2020 circular, which stipulated that the additional security performance could only be applied to three per cent of the bid price offered by the chosen bidder and could only be applied when the bid price was less than 20 per cent and with the road secretary’s approval on an individual basis.