The government is considering awarding national highway contracts only after obtaining all critical clearances, a move aimed at curbing project delays and cost escalation, according to two officials aware of the development.
Under the proposal being considered, road projects will be awarded only after at least 90% of the land required is acquired, a norm already being enforced more strictly in recent years. In addition, the ministry of road transport and highways wants prior approval to remove structures such as houses and buildings that fall along the project stretch, an issue that has emerged as a key source of delays, one official said.
According to the second official, even after and statutory approvals, pending permissions to remove or modify built-up structures have stalled several projects. A recent example was the Delhi-Dehradun expressway, where lack of clearance for certain structures delayed parts of the project and pushed timelines, the official said.
The tender for the 210-km expressway was awarded in January 2021, and some sections became operational in early 2025. The expressway was inaugurated by Prime Minister Narendra Modi on 14 April.
Minister for road transport and highways told Mint his ministry is taking up the matter to prevent delays in construction of highways.
“This is a very constructive and timely move. By ensuring that critical clearances, especially land acquisition and built-up structure approvals, are in place before awarding contracts, the ministry of road transport and highways is addressing one of the root causes of execution delays,” said professor Vijaya Sunder M of the Indian School of Business. “It reflects a shift from speed of awarding to quality of project readiness, which is essential for large-scale infrastructure delivery.”
De-risking projects
The move is part of a broader effort to de-risk projects before bidding, improve execution timelines and avoid cost overruns. Earlier, the ministry had introduced time-bound milestones for land acquisition and environmental clearances before bidding.
The award of road projects has slowed over the past two years. Contracts dropped to about 7,538 km of roads in FY25 from 12,376 km in 2022-23. About 7,000 km of road projects were awarded in FY26, a seven-year low.
Road construction has also moderated, with 10,660 km built in FY25, and 9,380 km in FY26, the lowest since 9,829 km of roads constructed in FY18. Highway construction stood at 12,349 km in FY24 and 10,331 km in FY23.
Analysts attributed the slowdown partly to execution bottlenecks and delayed project starts, with several awarded projects yet to begin construction. The proposed changes are aimed at ensuring that projects are “construction-ready” when they are awarded, reducing litigation, delays and revenue risks for developers while restoring the pace in India’s highway build-out.
“Doing a greater amount of preparation prior to bidding may initially reduce bid awards but will ultimately expedite the development of highway projects,” said Kuljit Singh, partner and national infrastructure leader at EY India. “Hence, this is a good step.”
Along with this, the government must renew its focus on hybrid annuity model (HAM) bids as the build-operate-transfer (BOT) toll model may be challenging to implement on a large scale considering the various competing roads being built in India and also due to the large upfront equity outlay required for BOT toll projects, Singh said.
Reducing overruns
“The move significantly de-risks execution by addressing persistent bottlenecks… By ensuring that projects are bid out only when they are largely implementation-ready, the government is improving risk visibility for developers and reducing the likelihood of timeline overruns and cost escalations,” said Bhavik Vora, partner and transportation & logistics industry leader at Grant Thornton Bharat.
According to Vora, over the medium term, this should translate into faster on-ground execution, improved capital efficiency and renewed private sector participation, ultimately making highway development more predictable, efficient, and sustainable.
Ministry data shows that the number of delayed national rose to 690 in April 2024. It fell marginally to 686 in April 2025 and further to 580 by end-July 2025. The 580 delayed projects are worth about ₹4 trillion. About half of them are behind schedule by up to six months and the remaining are behind by one to three years.
Gadkari informed the Rajya Sabha on 19 March that 85 under-construction national highway projects face delays exceeding three years due to a mix of structural, legal and environmental hurdles. Land acquisition accounts for a third of all delayed projects while contractor-related issues and forest clearances another third. Clearing of encroachments including removal of built-up structures account for a substantial portion of delays.
Queries sent to the ministry and the National Highways Authority of India remained unanswered till press time.