+
MoRTH to establish credit rating metric for private construction firms
ROADS & HIGHWAYS

MoRTH to establish credit rating metric for private construction firms

Companies that build infrastructure must have a credit rating of "BBB" or above to be eligible to submit a proposal for national highway projects funded by public-private partnerships (PPPs).

Any bidder who wishes to make a bid for the project but does not have such a credit rating must include a "letter of comfort" from their bank or other financial institution.

The Union Road Transport and Highways Ministry has never previously established such a credit rating criterion for private construction companies.

The decision was made in response to concerns that contractors who were awarded projects under the Build Operate and Transfer (BOT-Toll) and Hybrid Annuity Model (HAM) were having trouble securing funding to begin construction, which delayed the project's implementation.

The investment grade rating of "BBB" means that there is little chance of default and that the ability to meet financial obligations is deemed sufficient. However, this capability is more likely to be hampered by unfavourable commercial or economic situations.

Due to financial difficulties faced by several highway builders, some projects have been postponed. The Highways Ministry recently stated in response to a parliamentary query that at least 10 projects were delayed owing to issues with contractors, six of which were related to contractors' financial difficulties.

Also read:
Rs 4.88 billion order bagged by NBCC from MHA to build border road


Companies that build infrastructure must have a credit rating of BBB or above to be eligible to submit a proposal for national highway projects funded by public-private partnerships (PPPs). Any bidder who wishes to make a bid for the project but does not have such a credit rating must include a letter of comfort from their bank or other financial institution. The Union Road Transport and Highways Ministry has never previously established such a credit rating criterion for private construction companies. The decision was made in response to concerns that contractors who were awarded projects under the Build Operate and Transfer (BOT-Toll) and Hybrid Annuity Model (HAM) were having trouble securing funding to begin construction, which delayed the project's implementation. The investment grade rating of BBB means that there is little chance of default and that the ability to meet financial obligations is deemed sufficient. However, this capability is more likely to be hampered by unfavourable commercial or economic situations. Due to financial difficulties faced by several highway builders, some projects have been postponed. The Highways Ministry recently stated in response to a parliamentary query that at least 10 projects were delayed owing to issues with contractors, six of which were related to contractors' financial difficulties. Also read: Rs 4.88 billion order bagged by NBCC from MHA to build border road

Next Story
Infrastructure Urban

Naidu Seeks Rs 563 Crore For AP Sports Infrastructure

Andhra Pradesh Chief Minister N Chandrababu Naidu has sought Rs 563 crore from the Centre to boost sports infrastructure in the state, including Rs 538 crore for stadium development and Rs 25 crore to host the Khelo India Martial Arts Games 2025. Naidu made the request during a meeting with Union Youth Services and Sports Minister Mansukh Mandaviya in New Delhi on Wednesday.The CM urged early completion of Khelo India infrastructure projects in Tirupati, Rajahmundry, Kakinada, and Narasaraopeta, and called for an international-standard badminton training centre and a national aquatic sports hu..

Next Story
Infrastructure Transport

Tough Bidding Norms Slow NHAI Road Project Awards

Stringent bidding rules imposed by the Ministry of Road Transport & Highways (MoRTH) have led to a slowdown in project awards by the National Highways Authority of India (NHAI), despite a robust Rs 3.5 trillion pipeline. According to an HDFC Securities report, the shift to more cautious developer models now favours firms with strong balance sheets, as tighter qualification norms limit aggressive bidders.The revised norms mandate additional performance security, targeting the exclusion of players that previously submitted low bids—often 25 to 40 per cent below NHAI cost estimates—raisin..

Next Story
Infrastructure Transport

Mumbai Gets Coastal Nod for Next Promenade Phase

As Mumbai prepares to open two major sections of its expansive seafront promenade this week, the city’s civic authority has secured a key coastal clearance to advance further construction. The Maharashtra Coastal Zone Management Authority (MCZMA) has approved the commencement of work on the segment between Haji Ali and Baroda Palace, with tendering expected soon after project cost assessments.The promenade, stretching 7.5 km in length and 20 metres wide, is being designed as a flagship open space for walkers, joggers, and cyclists. Two critical stretches—2.75 km from Tata Garden to Haji Al..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?