Since the Ministry of Road Transport and Highways (MoRTH) implemented stricter bidding guidelines, the National Highways Authority of India (NHAI) has reported a slowdown in project awarding. As per HDFC Securities, new orders are being given under developer models, preferring companies with robust bank sheets.
Earlier relaxed bidding norms led to aggressive bidding. In fact, central road contracts were awarded at a median discount of 25 per cent between January 2024 and March 2025. Now, an additional performance security (APS) is a requirement of MoRTH’s updated standards. Fresh project awarding by NHAI has been muted in recent months, despite an award pipeline worth Rs 3.5 trillion. NHAI is making efforts to strengthen entrance barriers in order to prevent aggressive bidding.
Smaller unlisted competitors have been observed to bid 25-40 per cent less than the NHAI cost, which is extremely aggressive and affects the condition of the roads. According to the report, experts anticipate that NHAI ordering for 2025-26 will be back-ended at Rs 600 billion.
Road sector ordering has decreased in 2023-24 and 2024-25, while being a significant source of yearly inflows for engineering, procurement, and construction (EPC) firms. This has affected construction businesses’ growth forecasts and valuations.