Highway Builders: Payment Norms Eased for Cash Flow
Government officials and highway builders discuss plans in an office, reviewing blueprints and a road model.
Key Highlights
Government relaxes payment norms for highway builders, ensuring monthly payments for quality work. Aims to stabilize cash flows amid rising costs.
In a move aimed at providing financial relief to developers, payment norms for highway construction projects have been relaxed. The revised norms are intended to stabilize cash flows for developers who are currently facing challenges due to increased input and logistics expenses.
Under the existing Engineering, Procurement, and Construction (EPC) and Hybrid Annuity Mode (HAM) contracts, payments are typically disbursed upon reaching specific milestones or on a pro-rata basis. The updated guidelines will now allow for monthly payments to be released, provided the work completed meets the required quality standards.
In addition to the regular payments, the government has also decided to expedite the settlement of price adjustments and escalation dues. These settlements will be processed alongside the monthly payments, further easing the financial burden on highway builders.