Aggressive low bidding practices in highway construction projects are posing a significant challenge to the National Highways Authority of India (NHAI), potentially compromising the quality of infrastructure development. The trend, where companies quote abnormally low prices to secure projects, has prompted concerns about the long-term durability and safety of these constructions.

Several factors contribute to this issue. Relaxed bidding norms in the past led to a surge in aggressive bidding, with some unlisted competitors bidding 25-40% less than NHAI's estimated costs. This forces contractors to cut corners, potentially affecting the quality of materials and construction processes. The Ministry of Road Transport and Highways (MoRTH) has recognized this problem and implemented stricter bidding guidelines, including a requirement for additional performance security.

NHAI is actively strengthening entrance barriers to prevent aggressive bidding and ensure that only technically capable and experienced contractors qualify for projects. The authority has tightened contractor qualification norms, strengthened execution compliance, and enhanced financial transparency in awarding contracts. These measures are expected to improve the quality and timeliness of highway projects.

One key reform is the redefined criterion for "Similar Work" in bid qualifications. Previously, contractors would claim minor works as equivalent to large-scale projects to meet eligibility requirements. Now, "Similar Work" refers exclusively to completed highway projects that match the scale and complexity of the tendered project. This ensures that only contractors with relevant experience are considered for major developments.

NHAI is also tackling unauthorized practices such as unapproved contractors or exceeding subcontracting limits, which often lead to poor quality and project delays. Unauthorized subcontracting will be treated as an "Undesirable Practice" and will attract penalties similar to fraudulent activities. Furthermore, NHAI has disallowed third-party Bid and Performance Securities, ensuring that only securities backed directly by the bidders or their approved entities are accepted. This enhances financial transparency and improves the enforceability of contractual obligations.

To address the issue of poor quality work, NHAI has taken action against underperforming construction companies and consultancy firms, including penalties and debarment from bidding. In the past two years, NHAI barred over a dozen construction companies and 17 consultancy firms from bidding for projects and imposed penalties of around Rs 24 crore. Disciplinary action has also been taken against NHAI officers for negligence and dereliction of duty.

Prime Minister Narendra Modi has directed the road transport ministry to establish clear standards for highway subcontractors and revise the selection criteria for supervision engineers to ensure high quality of work during project execution. The ministry is also finalizing stringent norms for rating supervision engineers, which will make it difficult for poorly performing engineers to get work.

While NHAI's efforts to tighten bidding norms have slowed project awarding in the short term, these measures are crucial for ensuring the long-term quality and sustainability of highway infrastructure.