MoRTH proposes construction-ready highway contracts to curb delays and cost overruns

Livemint - Economy · 6 May 2026 · 2 min read
Prelims · Infrastructure Mains · GS3 Economy High relevance

The Ministry of Road Transport and Highways (MoRTH) plans to award highway contracts only after securing 90% land acquisition and structural clearances, addressing key bottlenecks that caused road construction to drop to 9,380 km in FY26 - the lowest since FY18.

Key points

MoRTH is implementing stricter pre-award filters requiring 90% land acquisition and clearance for built-up structures before contract awards, directly addressing two major causes of highway project delays.

Highway construction dropped to 9,380 km in FY26 from 12,349 km in FY24, with delayed projects worth ₹4 trillion - half delayed by up to 6 months, others by 1-3 years.

Delhi-Dehradun expressway exemplifies delays caused by pending structure clearances, with partial operations starting in 2025 despite 2021 tender award.

[GS3-Economy] The policy shift from rapid contract awards to project readiness aims to improve private sector participation through better risk allocation in Hybrid Annuity Model (HAM) projects.

580 national highway projects were delayed as of July 2025, with land acquisition (33%), contractor issues, and forest clearances (33%) being primary causes.

This connects to GS2-Governance by demonstrating institutional learning in infrastructure delivery, building on earlier reforms like time-bound milestone tracking for land/environmental clearances.

The policy aligns with National Infrastructure Pipeline goals by reducing average project delays from 3+ years (85 projects) through systematic de-risking.

[GS4-Ethics] Pre-clearing built-up structures addresses ethical concerns about arbitrary contract awards without resolving displacement impacts on communities.

Way Forward: India should institutionalize GIS-based land bank systems for real-time acquisition tracking, establish fast-track dispute resolution for structures, and mandate environmental clearance clustering for corridor projects.

Key terms

Hybrid Annuity Model (HAM)

A public-private partnership model for highway development where government bears 40% of construction cost during building phase and remaining 60% as annuity payments plus interest over 15 years. Its UPSC relevance lies in balancing risk-sharing between public and private sectors while addressing infrastructure financing challenges.

Ministry of Road Transport and Highways (MoRTH)

The central ministry responsible for national highway development and transport policies. Its constitutional significance stems from Entry 23 of Union List (highways declared as national highways) and its role in implementing PM Gati Shakti's multi-modal connectivity vision.

Land Acquisition

The process of acquiring private land for public infrastructure projects under Right to Fair Compensation and Transparency in Land Acquisition Act, 2013. For UPSC, it's critical for understanding infrastructure governance challenges balancing development needs with property rights under Article 300A.

National Highways Authority of India (NHAI)

The statutory body under MoRTH established by NHAI Act, 1988 to develop/maintain national highways. Its UPSC relevance includes implementing Bharatmala Pariyojana and evolving PPP models while facing challenges like ₹29,000 crore arbitration liabilities (SC compensation ruling).