MoRTH Revises Schedule H of EPC Contracts: Enhanced Stage-Wise Payment Structure and Progress Standards Introduced

The Ministry of Road Transport & Highways (MoRTH) vide circular F. No. COVID-19/RoadMap/JS(H)/2020, dated October 11, 2024, has issued an amendment to Schedule H of the Model EPC (Engineering, Procurement, and Construction) Contract Agreement, updating the payment structure and weightage allocation for National Highway projects. The amended Schedule H is to be appended to all future tender documents executed in EPC mode. The circular introduces specific work stages with corresponding weightage percentages to enhance transparency and improve cash flow for contractors.

Key Highlights of the Amendment:

• Stage-Wise Payment Weightages: The amendment provides detailed weightages for each stage of project work across various components, including roadworks, bridges, and protective structures:

i) Road Works: Specific weightages are now allocated to individual layers, such as subgrade, sub-base, and wearing coat, allowing contractors to receive separate payments for each completed layer.

ii) Bridge and Culvert Construction: Each construction phase has defined weightages, covering areas from foundations and superstructures to smaller items like expansion joints and crash barriers.

iii) Protection and Ancillary Works: Payment weightages are now clearly assigned to non-primary structures like roadside drains, crash barriers, and retaining walls, aiding in the tracking and management of these additional expenditures.

• Foundation Payment Details: For bridges and underpasses, the amendment outlines milestone-based payments tailored to different foundation types. For example:

i) Pile Foundations: Payments are allocated based on stages, such as “piling up to the bottom of the pile cap” and completing the pile cap.

ii) Well Foundations: Payment stages are defined by milestones like “completion of well steining to the bottom of the well cap,” creating a more granular, phase-based payment structure that ensures timely funding at each foundational stage.

• Adjusted Measurement Standards for Payments: To standardize progress tracking, specific measurement standards are now set for structures such as culverts and drains. For instance, drain payments are issued per completed 100 meters, ensuring that payments align with precise, measurable milestones across different project stages.
• Pro-Rata Payments for Incremental Progress: To support contractor cash flow, the amendment allows incremental, pro-rata payments based on measurable progress:

i) Roadworks: Payments can be released upon completing every 500 meters or 10% of the total project length, whichever is less, even if the full stage isn’t completed.

ii) Culverts and Bridges: Payments can be disbursed at various sub-stages, including foundation work, completion of superstructures, and ancillary items, ensuring quicker reimbursement for partially completed sections.

• Monthly Interim Payments: New provisions introduce monthly interim payments to facilitate ongoing work. Now, 90% of the value of in-progress work is payable monthly, irrespective of milestone completion. Additionally, prefabricated or pre-cast elements, such as beams or concrete segments, qualify for 75% payment upon manufacturing, easing financial strain and supporting continuous progress.
• Flexible Provisions for Complex Projects: For specialized infrastructure projects, such as long-span or cable-stayed bridges and tunnel projects, the amendment allows for tailored payment schedules and weightage allocations. These customized adjustments, which require pre-approval before bidding, ensure a more appropriate financial structure for projects with unique engineering demands.

These amendments to Schedule H are expected to foster cash flow stability, enhance financial clarity, and enable smoother execution across the National Highway network, supporting contractors in managing ongoing and future infrastructure projects with greater financial transparency and efficiency.