Union Road Transport and Highways Minister Nitin Gadkari announced on Wednesday that the government plans to utilize Goods and Services Tax (GST) records to scrutinize subcontracting layers in highway projects. This initiative comes in response to concerns over projects being awarded at significantly discounted bids, which may compromise quality. To address these issues, the government is preparing regulations to restrict the extent of subcontracting allowed for contractors.
“Earning money is not a crime. If you do business, contractorship, you must earn some money. He added that he had liberalised and diluted technical qualifications to encourage new contractors to enter the sector.
He said the concerned chief general manager of the National Highways Authority of India (NHAI) was asked to forfeit the contractor’s bank guarantee and take action so that the contractor could not bid for future National Highways Authority of India (NHAI) tenders. Gadkari said the move would target cases where work passes through multiple layers of subcontractors and projects are executed at 30-40% below the original bid.
Addressing a Federation of Indian Chambers of Commerce and Industry (FICCI) event in New Delhi, the minister said excessive subcontracting was contributing to quality problems and that contractors sometimes offered explanations such as rain when confronted with poor work. But while doing the work, there must be quality work,” he said. Gadkari also said that changes made to technical qualification requirements had contributed to the problem, calling it a “mistake.
