New Milestone Framework for National Highway Projects

Delays in the execution of National Highway (NH) projects have long been a concern for the Ministry of Road Transport and Highways (MoRTH). Despite timely project approvals and awards, construction often gets stalled due to incomplete land acquisition or pending environmental, forest, and wildlife clearances. These bottlenecks not only push back the declaration of the appointed date but also lead to significant time and cost overruns, triggering contractual disputes and undermining infrastructure targets.

Recognizing the critical need to streamline the pre-construction process, the MoRTH has reviewed existing practices and identified the lack of alignment between key administrative actions and project milestones as a major hurdle. Currently, tenders are sometimes floated or awarded before securing the required statutory clearances or completing land acquisition to an adequate extent, resulting in post-award complications.

To address these issues, the MoRTH has issued a comprehensive directive vide its circular bearing reference no. NH-24028/02/2024-H dated May 6, 2025 (the “Circular”) that mandates synchronizing the timelines of project approvals, tendering, and declaration of appointed dates with the progress of land acquisition and statutory clearances.

This directive will apply to all national highway projects for which tenders are issued on or after 1st June 2025.

Under the new framework:

1. The process of environmental clearance and wildlife clearance must commence once the project alignment is approved and completed prior to receipt of bids.
2. Forest clearance must also be initiated upon alignment approval and completed before the issuance of the Letter of Award (LoA).
3. General Arrangement Drawings (GADs) for railway crossings and inland waterways must be prepared based on the draft feasibility report and finalized prior to bid receipt.
4. Utility shifting estimates must be completed before the invitation of bids, based on the draft feasibility stage.

Regarding land acquisition, a more structured and time-bound approach is now required:

1. A notification under Section 3A of the National Highways Act, 1956 (power to acquire) must be issued within 60 days of alignment approval.
2. Before the receipt of bids, Section 3D of the National Highways Act, 1956 notification (declaration of acquisition) must be issued for at least 90% of the Right of Way (ROW).
3. Prior to issuing the LoA, awards under Section 3G of the National Highways Act, 1956 (compensation determination) should be issued for over 90% of the ROW.

The Ministry has also laid out requirements for possession of land:

1. Post-award and before the appointed date, at least 90% of the ROW under Section 3G must be available.
2. For projects involving standalone bridges, Road Over Bridges (ROBs) and tunnel-based projects, 100% land possession must be secured in approach stretches of up to 1 km on either side before issuance of the LoA.

Importantly, the assessment and payment for structures must be treated as part of the compensation during land acquisition and should be completed as per the project milestone timelines outlined above.

By linking tender awards and appointed dates to concrete land acquisition and environmental milestones, MoRTH has instituted a legally enforceable, milestone-driven framework that redefines project readiness. These measures aim to ensure that projects are construction-ready at the time of award, thereby eliminating avoidable delays and improving execution timelines. This structured approach is expected to limit litigation, prevent mis-project standstills, and give contractors the certainty needed to mobilize promptly, ultimately accelerating delivery and improving cost-efficiency across the national highway programme.