Telangana Caps Excess HAM Road Bids At Five Per Cent For Rs 130 bn

01 Jun 2026 CW Team

The Roads and Buildings Department is executing 441 road works under Phase One of the HAM programme at an estimated cost of about Rs 130.06 billion (bn), covering nearly 6,092 km across 34 packages that include major district roads, state highways and connectivity corridors. The Panchayat Raj Department is implementing more than 2,100 rural road projects covering around 7,450 km under separate packages. The broader expansion seeks to strengthen inter?district connectivity, reduce travel time and support industrial and logistics movement.

The revised tender norms follow instances of higher?than?estimated financial bids in recent months, with technical evaluations for several projects already completed while financial bids remain under review. Officials noted that excess bid percentages in the state were comparatively lower than in some other states executing HAM projects and emphasised the impact of higher construction input prices, including bitumen, diesel, GST?related expenses, transportation charges and long?term maintenance liabilities. Contractors were reported to be factoring inflation?linked operational costs when quoting.

Authorities expect the five per cent cap to help maintain financial discipline in upcoming contracts, prevent award delays caused by abnormal premiums and foster a more competitive tendering environment for future highway and road infrastructure projects. The HAM, which shares project costs and risks between government and private developers, has been widely adopted across several states to boost private participation while limiting funding pressure on contractors during execution.

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The Telangana government has revised tender conditions for large road infrastructure projects implemented under the Hybrid Annuity Model (HAM), capping excess bids at five per cent above estimated contract values. The cap applies to HAM road projects worth around Rs 130 billion (bn) and is intended to improve cost control, transparency and faster execution. Officials framed the move as a measure to curb inflated quotations while preserving contractor interest amid rising input costs. The Roads and Buildings Department is executing 441 road works under Phase One of the HAM programme at an estimated cost of about Rs 130.06 billion (bn), covering nearly 6,092 km across 34 packages that include major district roads, state highways and connectivity corridors. The Panchayat Raj Department is implementing more than 2,100 rural road projects covering around 7,450 km under separate packages. The broader expansion seeks to strengthen inter?district connectivity, reduce travel time and support industrial and logistics movement. The revised tender norms follow instances of higher?than?estimated financial bids in recent months, with technical evaluations for several projects already completed while financial bids remain under review. Officials noted that excess bid percentages in the state were comparatively lower than in some other states executing HAM projects and emphasised the impact of higher construction input prices, including bitumen, diesel, GST?related expenses, transportation charges and long?term maintenance liabilities. Contractors were reported to be factoring inflation?linked operational costs when quoting. Authorities expect the five per cent cap to help maintain financial discipline in upcoming contracts, prevent award delays caused by abnormal premiums and foster a more competitive tendering environment for future highway and road infrastructure projects. The HAM, which shares project costs and risks between government and private developers, has been widely adopted across several states to boost private participation while limiting funding pressure on contractors during execution.

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