Norms relaxed for working capital needs of road builders
ROADS & HIGHWAYS

Norms relaxed for working capital needs of road builders

The Ministry of Road Transport and Highways (MoRTH) has reportedly decided to relax norms to release partial payment or a working capital advance to road and highway builders for the work they have carried out, even if the builder has failed to achieve the construction milestone set by the authorities. The move is aimed at improving the liquidity of builders and to help complete projects stuck due to a funding crunch.

As reported, the provision for the advance will be extended to all highway projects executed with 100 per cent government funding or EPC (Engineering, Procurement, Construction) contracts as well as for projects under the Hybrid Annuity Model (HAM) mode. For contracts under the EPC model, the government releases the entire payment as and when a builder achieves the project milestones during construction. In the case of projects under the HAM mode, government agencies pay only 40 per cent of the cost during construction in five equal instalments. The remaining amount is released in 30 biannual instalments, which commences six months after the project is completed. As per a circular released by MoRTH on the norms relaxed, contractors availing this advance payment will have to pay the interest when the final payment is released, once the set milestone is achieved. For instance, NHAI or any other road owning agency can give the interest bearing working capital advance to the road builder even if it has completed only 5 km of a highway stretch against the set milestone of 10 km for release of payment.

The Ministry of Road Transport and Highways (MoRTH) has reportedly decided to relax norms to release partial payment or a working capital advance to road and highway builders for the work they have carried out, even if the builder has failed to achieve the construction milestone set by the authorities. The move is aimed at improving the liquidity of builders and to help complete projects stuck due to a funding crunch. As reported, the provision for the advance will be extended to all highway projects executed with 100 per cent government funding or EPC (Engineering, Procurement, Construction) contracts as well as for projects under the Hybrid Annuity Model (HAM) mode. For contracts under the EPC model, the government releases the entire payment as and when a builder achieves the project milestones during construction. In the case of projects under the HAM mode, government agencies pay only 40 per cent of the cost during construction in five equal instalments. The remaining amount is released in 30 biannual instalments, which commences six months after the project is completed. As per a circular released by MoRTH on the norms relaxed, contractors availing this advance payment will have to pay the interest when the final payment is released, once the set milestone is achieved. For instance, NHAI or any other road owning agency can give the interest bearing working capital advance to the road builder even if it has completed only 5 km of a highway stretch against the set milestone of 10 km for release of payment.

Next Story
Real Estate

Sea Breeze launches La Wisteria in Siolim, Goa

Sea Breeze Group has announced the launch of La Wisteria, a RERA-approved luxury residential project in Siolim, North Goa, offering 80 boutique 1BHK and 2BHK apartments with private pools and lush paddy field views. Targeted for completion by December 2027, the development is designed to offer a high-end lifestyle and attractive rental returns.Each unit comes with a private pool and is surrounded by scenic vistas, ensuring exclusivity and long-term value. Positioned on a 3,545 sq m corner plot, the property is open on all four sides and bordered by greenery on two, enhancing privacy and openne..

Next Story
Real Estate

Ashiana Housing launches premium boutique project in Jaipur

Ashiana Housing, a listed real estate developer on NSE and BSE, has announced the launch of Ashiana Aravali, a low-density, premium residential project in Jagatpura, Jaipur. Designed for upper-mid and premium homebuyers, the development offers a rare combination of exclusivity, greenery, and urban connectivity in one of the city’s fastest-growing corridors.The boutique project comprises 50 residences, with 25 each of 4 BHK and 3 BHK units. The 4 BHK homes are offered in two configurations—2641 sq. ft. and 2630 sq. ft., while the 3 BHK homes are sized at 2312 sq. ft. Each apartment includes..

Next Story
Resources

Stylework’s MSA powers flexible workspace efficiency in 120 cities

Delhi, India – May 30, 2025: Stylework, a leading flexible workspace aggregator, announced the continued success of its Master Service Agreement (MSA)—a centralised solution that simplifies workspace management for over 50 enterprises and vendors across 120+ cities. Designed to support Stylework’s long-term vision of scalable workspace integration, the MSA has delivered measurable gains in operational efficiency, administrative control, and strategic agility. The solution reduces the complexity of managing multiple workspace contracts by consolidating them under a single organisatio..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?