Govt plans Rs 5 Lakh/km Threshold for road project contracts
ROADS & HIGHWAYS

Govt plans Rs 5 Lakh/km Threshold for road project contracts

The government plans to establish an Rs 5 lakh per kilometre threshold for awarding contracts for the preparation of Detailed Project Reports (DPRs) for road projects. This marks a significant increase from the current average of Rs 1 lakh per kilometre and signifies a shift from the least-cost to a fixed-cost model, according to reports from the Economic Times.

Presently, bidders often quote the minimum price to secure contracts, leading to the production of low-quality DPRs. This, in turn, results in modifications to the scope of work, variations, time delays, and cost overruns, ultimately causing project delays. To address this issue, the government is proposing a minimum price threshold for contract awards to enhance the quality of DPRs, aligning them with international standards and aiming to prevent delays in projects.

Road Transport Minister Nitin Gadkari has expressed concerns about the substandard DPRs prepared by Indian companies, linking them to project delays and road accidents. The Ministry of Road Transport and Highways (MoRTH) is currently seeking feedback from stakeholders on these proposed changes and is expected to finalise new rules for DPRs soon.

The suggested minimum price is based on global norms related to the salaries of skilled personnel and other relevant factors. Although a final decision is pending, the government believes that setting a threshold will encourage the submission of high-quality DPRs.

Acknowledging that a fivefold increase in DPR costs may pose an additional financial burden, the government remains optimistic that the long-term benefits derived from improved DPR quality and resulting savings will outweigh these initial costs.

The government plans to establish an Rs 5 lakh per kilometre threshold for awarding contracts for the preparation of Detailed Project Reports (DPRs) for road projects. This marks a significant increase from the current average of Rs 1 lakh per kilometre and signifies a shift from the least-cost to a fixed-cost model, according to reports from the Economic Times. Presently, bidders often quote the minimum price to secure contracts, leading to the production of low-quality DPRs. This, in turn, results in modifications to the scope of work, variations, time delays, and cost overruns, ultimately causing project delays. To address this issue, the government is proposing a minimum price threshold for contract awards to enhance the quality of DPRs, aligning them with international standards and aiming to prevent delays in projects. Road Transport Minister Nitin Gadkari has expressed concerns about the substandard DPRs prepared by Indian companies, linking them to project delays and road accidents. The Ministry of Road Transport and Highways (MoRTH) is currently seeking feedback from stakeholders on these proposed changes and is expected to finalise new rules for DPRs soon. The suggested minimum price is based on global norms related to the salaries of skilled personnel and other relevant factors. Although a final decision is pending, the government believes that setting a threshold will encourage the submission of high-quality DPRs. Acknowledging that a fivefold increase in DPR costs may pose an additional financial burden, the government remains optimistic that the long-term benefits derived from improved DPR quality and resulting savings will outweigh these initial costs.

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code