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The Telangana government has revised tender rules for its Hybrid Annuity Model (HAM) road projects by capping excess bids at 5% above estimated project costs. The move applies to road development works worth nearly INR 13,000 crore and is aimed at improving cost control, transparency and faster execution. The state is currently implementing hundreds of road projects across districts under the HAM model to improve connectivity and support industrial growth. Officials said the revised norms would help avoid inflated quotations while maintaining contractor participation amid rising construction costs, including higher bitumen, fuel and material prices.
The Telangana government has revised tender conditions for large road infrastructure projects being executed under the Hybrid Annuity Model (HAM), introducing a cap of 5% on bids quoted above the estimated contract value. The decision applies to HAM road projects worth around INR 13,000 crore and is expected to bring tighter cost control and more uniform bidding in state highway and road development works. Advertisement
The revised policy comes as Telangana continues to expand its road network through one of the state’s largest infrastructure programmes. The Roads and Buildings Department is currently executing 441 road works under Phase-I of the HAM programme at an estimated cost of around INR 13,006 crore. These projects cover nearly 6,092 km across 34 packages and include major district roads, state highways and connectivity corridors.
At the same time, the Panchayat Raj Department is implementing more than 2,100 rural road projects covering around 7,450 km under separate development packages. The larger road expansion programme is aimed at improving inter-district connectivity, reducing travel time and supporting industrial and logistics movement across Telangana.
The latest changes in tender conditions follow discussions over higher-than-estimated quotations received in some HAM bids in recent months. State officials had earlier clarified that technical evaluations for several projects had already been completed while financial bid assessments were still under review. Roads and Buildings Minister Komatireddy Venkat Reddy had rejected allegations related to abnormal tender premiums and maintained that the bidding process was being conducted as per norms.
According to government officials, excess bid percentages in Telangana were comparatively lower than those reported in some other states executing HAM-based infrastructure projects. Officials also pointed to the sharp rise in construction input costs over the last few years, including increases in bitumen rates, diesel prices, GST-related expenses, transportation charges and long-term road maintenance costs.
Bitumen prices, a major component in road construction, have increased significantly compared to earlier project cycles, affecting overall project estimates and contractor pricing. Contractors have also been factoring in inflation-linked operational costs and maintenance liabilities while quoting for HAM projects.
The Hybrid Annuity Model has become a widely used framework for highway and road construction projects in India over the last several years. Under the model, project costs and risks are shared between the government and private developers. The structure was introduced to improve private sector participation in infrastructure development while reducing funding pressure on contractors during execution.
Several states including Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu have adopted HAM-based road development projects over the past decade. Telangana accelerated its HAM road programme to strengthen regional connectivity and improve access to industrial zones, agricultural belts and emerging urban centres.
Officials believe the revised bidding norms will help maintain financial discipline in upcoming contracts while ensuring that project awards are not delayed due to unusually high quotations. The government is also expecting the move to create a more competitive tendering environment for future highway and road infrastructure projects in the state.
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