The Government has announced a set of measures to address the impact of rising input costs on National Highway projects, in view of the prevailing global scenario that has led to an increase in prices of fuel, construction materials and logistics.
According to a statement by the Ministry of Road Transport and Highways on Thursday, 2 April, the measures are aimed at providing relief to contractors and concessionaires while ensuring uninterrupted construction and maintenance of National Highway projects across the country.
The measures will remain in force for three months, from 1 April to 30 June 2026, or until further review based on the global economic situation.
As part of the initiative, provisions under Engineering, Procurement and Construction (EPC) and Hybrid Annuity Model (HAM) projects have been relaxed to enable monthly payments to contractors and concessionaires for work executed in compliance with prescribed quality standards and specifications.
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The government has also modified the price adjustment mechanism under EPC contracts to better reflect prevailing market conditions.
The Wholesale Price Index (WPI) for key inputs such as construction machinery, cement, steel and other commodities will now be considered for one month prior to the relevant Interim Payment Certificate (IPC) month, instead of the earlier three-month reference period.
Similarly, for bitumen, the applicable retail price will be taken as on the first day of the month one month prior to the IPC month, replacing the earlier three-month lag in price reference.
Additionally, price adjustment payments under EPC contracts will be released along with monthly payments.
In HAM projects, price escalation calculated using the Price Index Multiple (PIM) may also be disbursed on a monthly basis, a move expected to improve liquidity and cash flow for contractors and concessionaires.
