Highways Ministry Activates Penalty Clause Against Two Project Developers

The Ministry has formally notified a catastrophic event on a project involving the four-lane Poondiankuppam-Sattanatharupam section of NH-45 (now designated NH-32) in Tamil Nadu, spanning from kilometre 67 to kilometre 123. The project, valued at Rs 2,120 crore, was awarded to M/S Poonadinkuppam Sattanathapuram Section Private Limited, promoted by M/s Oriental, under a Highway-Aided Management (HAM) concession agreement. The project commenced on January 20, 2022, with a contractual completion deadline of January 19, 2025.

Under the newly introduced catastrophic failure provision, highway-owning agencies are empowered to impose stringent penalties on developers responsible for significant structural failures. The clause allows authorities to bar affected developers from participating in new highway tenders for a period of two years, substantially restricting their business opportunities.

Beyond the bidding suspension, developers found culpable face negative performance ratings within the National Highways Authority's assessment framework. These adverse ratings are expected to substantially diminish their competitive standing and likelihood of securing future highway projects, both from central and state authorities.

The invocation of this clause represents a significant escalation in the Ministry's enforcement mechanisms against project developers. It signals a stricter regulatory approach aimed at ensuring quality standards and timely delivery on critical National Highway infrastructure projects across the country.