IndiaPosted at: Nov 2 2026 10:39AM


NHAI sets new funding, approval rules for projects undertaken for government agencies

New Delhi, Nov 2 (UNI) The National Highways Authority of India (NHAI) has laid down fresh guidelines for executing infrastructure projects for government departments, public sector undertakings, and other agencies, requiring them to bear the entire project cost and introducing separate financial and administrative approval procedures.
Under the policy circular, NHAI will undertake such projects as deposit works at the request of the concerned agency, which must provide funds in advance or in mutually agreed phases.
"Entire (100 per cent) expenditure for these Works shall be met from the funds provided by the concerned Principal Agency," the authority said.
The circular applies to works undertaken for government departments, public sector undertakings, and other entities, excluding the Ministry of Road Transport and Highways (MoRTH).
It specifies that projects costing up to Rs 100 crore, excluding GST, require approval from the NHAI chairman, while projects exceeding Rs 100 crore require approval from the NHAI Executive Committee.
The Internal Appraisal Committee will examine proposals in both categories.
The guidelines require the requesting agency to submit the proposed scope of work and relevant technical details for scrutiny. After in-principle approval from the chairman, a detailed project report covering feasibility, cost estimates, and engineering designs will be prepared.
NHAI has also introduced specific provisions to address cost differences during project execution.
Any variation up to 20 per cent over the approved sanctioned cost must be agreed upon by the requesting agency at the initial approval stage or through a suitable memorandum of understanding.
If the variation exceeds 20 per cent, fresh approval and funding sanction from the agency will be required before additional expenditure is incurred.
For variations in awarded costs, approval powers have been divided among the concerned NHAI member, the chairman, and the Executive Committee, depending on the extent of the increase.
The authority will charge an agency fee of 1 per cent of the civil cost. Separate provisions prescribe supervision charges of three per cent of project cost for works costing up to Rs 100 crore and two per cent for projects exceeding that amount.
The circular also provides for a separate provision of one per cent of the project cost towards the preparation of a detailed project report, wherever required, subject to adjustment against actual expenditure.
Where proposed deposit works overlap an existing NHAI project, priority will be given to examining whether the existing contractor or concessionaire can execute the additional work.
If the contractor or concessionaire does not agree, the work may be awarded separately through competitive bidding.
NHAI has made it clear that work can begin only after necessary approvals are in place and advance funds are received under the agreed funding arrangement.
The guidelines require a separate bank account for each deposit work to ensure proper accounting and monitoring of expenditure.
Financial officers at project implementation units and NHAI headquarters will jointly prepare quarterly reconciliation statements covering deposits received, charges levied, and payments made.
The authority will retain the power to approve extensions of up to six months beyond the stipulated project duration. Further extensions will require prior approval from the requesting agency.
Any unspent funds will be refunded to the concerned agency after completion of the project, without interest liability on NHAI.
Completed works will be formally handed over to the requesting agency after issuance of the applicable completion certificate and a No Dues Certificate from NHAI's Finance Division.
NHAI will handle disputes arising during execution on behalf of the concerned agency in accordance with the applicable contractual dispute-resolution provisions.
The circular was issued by Chief General Manager (Coordination), C.S. Sanjay Kumar Patel.
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Tags: #NHAI sets new funding# approval rules for projects undertaken for government agencies
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see more..