Telangana Caps HAM Bids at 5% for Big Highway Projects

Announcement

In a recent decision by the Telangana government, a new cap has been placed on Hybrid Annuity Model (HAM) road project tenders, limiting bids to no more than 5% above estimated costs. This applies to highway projects valued at INR 13,000 crore.

As cost pressures mount due to increasing material prices, particularly bitumen and diesel, the state has moved to foster a more competitive and transparent bidding environment.

The Roads and Buildings Department is responsible for implementing over 441 road projects within the state's expansive infrastructure programme, spanning 6,092 km. This policy change comes as part of efforts to streamline execution and manage financial risks by ensuring bids remain within a reasonable margin above project estimates.

Key Features

Added scrutiny during the evaluation of both technical and financial bids intends to avoid previous issues of inflated quotes, which have potentially delayed past project starts. The state aims to enhance district connectivity and boost industrial growth by advancing rapidly with its infrastructure goals.

Key stakeholders, including contractors, developers, and the Roads and Buildings Minister, have highlighted the necessity of such measures amidst the ongoing increase in construction inputs.

By aligning financial discipline with execution imperatives, Telangana not only seeks to secure cost-effective procurement but also to accelerate delivery timelines for economic and logistical benefits.