Increased competition to create stress on road sector

23 Jun 2021 CW Team

As indicated by an ICRA report, the competition has heated up with the entry of new players in the road sector and with the bidders quoting a discount as high as 30-35% to the NHAI's base price. In addition, the BOT (HAM) also witnessed heightened competition resulting in average premium to NHAI cost-reducing from around 25-30% to 15% and even negative O&M bid in some cases. All this indicates the potential of putting stress in the sector as discounted bids come at a time of high commodity prices (steel, cement, etc.).

Rajeshwar Burla, Co-Group Head & Vice President, Corporate Ratings, ICRA, told the media that the discounted bids to NHAI's base price are coinciding with the period of high commodity prices (cement, steel, etc.). As a result, the impact on the profitability of the contracting companies could be substantial.

The lowering of bids has come in the wake of raised competition, with the number of bidders surpassing 40 participants, of which 30 were qualified, for some of the EPC projects and 10-15 participants (around 5-10 earlier) for HAM projects.

One of the reasons for increased competitive intensity is that the Ministry of Road Transport and Highways (MoRTH) has provided relaxations in the eligibility criteria of bidders for HAM/EPC projects. As a result, there has been an entry of new players in the road sector from other sectors like hospitals, smart city, oil and gas, stadium, hotel, warehouses/silos, and an increase in the bidding eligibility for existing players as well.

ICRA told the media that the Lower State Capex, higher opportunities and muted private sector opportunities in the road sector have pushed more entities towards the road sector.

Image Source

Also read: NHAI makes Monthly Drone Survey mandatory for all NH Projects

Also read: NHAI to increase size of InvIT to Rs 15,000 crore

A report on the sector has shown that the increased competition in the road sector and subsequent aggressive bidding has the potential to build up stress on the working capital cycle resulting in projects getting delayed or stuck. As indicated by an ICRA report, the competition has heated up with the entry of new players in the road sector and with the bidders quoting a discount as high as 30-35% to the NHAI's base price. In addition, the BOT (HAM) also witnessed heightened competition resulting in average premium to NHAI cost-reducing from around 25-30% to 15% and even negative O&M bid in some cases. All this indicates the potential of putting stress in the sector as discounted bids come at a time of high commodity prices (steel, cement, etc.). Rajeshwar Burla, Co-Group Head & Vice President, Corporate Ratings, ICRA, told the media that the discounted bids to NHAI's base price are coinciding with the period of high commodity prices (cement, steel, etc.). As a result, the impact on the profitability of the contracting companies could be substantial. The lowering of bids has come in the wake of raised competition, with the number of bidders surpassing 40 participants, of which 30 were qualified, for some of the EPC projects and 10-15 participants (around 5-10 earlier) for HAM projects. One of the reasons for increased competitive intensity is that the Ministry of Road Transport and Highways (MoRTH) has provided relaxations in the eligibility criteria of bidders for HAM/EPC projects. As a result, there has been an entry of new players in the road sector from other sectors like hospitals, smart city, oil and gas, stadium, hotel, warehouses/silos, and an increase in the bidding eligibility for existing players as well. ICRA told the media that the Lower State Capex, higher opportunities and muted private sector opportunities in the road sector have pushed more entities towards the road sector. Image Source Also read: NHAI makes Monthly Drone Survey mandatory for all NH Projects Also read: NHAI to increase size of InvIT to Rs 15,000 crore

Infrastructure Urban

02 Jun 2026

VECV Sales Rise 7.8 Per Cent In May 2026

VE Commercial Vehicles recorded sales of 7,978 units in May 2026, compared to 7,401 units in May 2025, registering growth of 7.8 per cent. This included 7,789 units from the Eicher brand and 189 units from the Volvo brand.Eicher branded trucks and buses reported sales of 7,789 units during the month, up 7.3 per cent from 7,258 units a year earlier. In the domestic commercial vehicle market, Eicher sales rose 9.1 per cent to 7,375 units from 6,758 units in May 2025.Exports declined 17.2 per cent to 414 units from 500 units in the corresponding month last year. Volvo Trucks and Volvo Buses recor..

Infrastructure Urban

02 Jun 2026

Table Space Strengthens DESYN Leadership Team

Table Space has announced strategic leadership appointments within DESYN, its integrated Design and Build business, as it looks to strengthen operations across key enterprise and GCC markets in India. DESYN was launched as a strategic extension of Table Space’s workspace solutions portfolio to meet rising demand for agile, high-quality and rapidly deployable enterprise workspaces.Shruti Ookabhoy has joined DESYN as Executive Director and will lead the Design vertical, focusing on design capability, operational excellence and team development across markets. She brings over 22 years of experi..

Infrastructure Transport

02 Jun 2026

Concord Associate Bags Rs 2.79 Bn Kavach Order

Concord Control Systems said its associate company, Progota India, has received a Rs 2.79 bn domestic order from Indian Railways for the supply, installation, testing and commissioning of on-board Kavach 4.0 loco equipment.The order is scheduled for execution within 12 months and strengthens Concord’s role in India’s railway safety and signalling ecosystem. Kavach is India’s indigenous automatic train protection system, designed to improve operational safety by helping prevent signal passing at danger and reducing collision risks.Gaurav Lath, Joint Managing Director, Concord Control Syst..