NHAI’s Revised Policy on Reimbursement of Statutory and Ancillary Charges

Recognizing the persistent bottlenecks caused by delayed utility shifting in highway projects, the National Highways Authority of India (NHAI) has issued a circular dated September 3, 2025 (Ref. No. 7.2.18/2025) (the “Circular“), revising its policy for Reimbursement of Statutory and Ancillary Charges related to Utility Shifting Works (the “Policy”). The Policy is particularly relevant for projects under the Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) modes, with a focus on transmission line relocation.

The revised policy builds on the 2021 SOP issued under MoRTH Circular (Ref. No. RW/NH-33044/29/2015-S&R(R)pt. dated February 11, 2021), which limited reimbursement to supervision charges payable directly to Utility Owning Agencies (UOAs).

However, this restrictive approach excluded other legitimate statutory and ancillary charges such as survey charges, processing or application or registration fees, and safety No-Objection Certificate (NoC) fees routinely levied by UOAs. The exclusion of such costs frequently stalled utility shifting, adversely impacting project timelines and increasing disputes between contractors, concessionaires, and implementing agencies.

Following deliberations by the NHAI Executive Committee (EC Note No. E-252464/EC-674 dated July 22, 2025), the new policy mandates that NHAI will directly bear the following costs, along with applicable taxes, for all ongoing and existing HAM and EPC projects:

1. Survey Charges.
2. Processing/Application/Registration Fees (wherever applicable).
3. Safety NoC Fees (wherever applicable).

These charges are to be paid upfront by NHAI to the respective UOAs to avoid administrative delay, with the amounts subsequently recovered from the next Interim Payment Certificate (IPC) of the concerned EPC contractor or concessionaire. This mechanism ensures both timely payments and fiscal accountability.

To operationalize the change, NHAI has amended the treatment of costs under the earlier 2021 SOP, explicitly incorporating the above charges as reimbursable items to be paid by NHAI along with associates taxes and recovered from the next IPC bill. By integrating these costs into the reimbursement structure, NHAI aligns contractual practice with on-ground realities and addresses a key impediment to project execution.

By expanding reimbursable costs beyond supervision charges and mandating advance payment with structured recovery, the Circular provides procedural clarity, ensures timely utility shifting, and minimizes disputes. It represents a systematic strengthening of governance under HAM and EPC projects, embedding transparency and efficiency to support the timely delivery of the national highway programme