Cost escalation relief for National Highway contractors from 1 April to 30 June 2026
The Road Transport Ministry on 2 April 2026 announced a cost escalation compensation mechanism for National Highway projects, allowing monthly payments and a shorter price-index reference period from 1 April to 30 June 2026.
Summary
The Ministry of Road Transport and Highways on 2 April 2026 announced measures to cushion National Highway projects from rising prices of fuel, construction materials and logistics caused by the global situation. The measures apply for three months, from 1 April to 30 June 2026, or until further review. Provisions for EPC and Hybrid Annuity Model (HAM) projects were relaxed to allow monthly payments for work meeting quality standards. For price adjustment under EPC contracts, the Wholesale Price Index for components such as construction machinery, cement and mild steel will now be taken for one month before the relevant Interim Payment Certificate month instead of three months, and bitumen will use the official retail price on the first day of the month one month before.
Key facts
- Period
- 1 April – 30 June 2026 (or till review)
- Payments
- Monthly payments for EPC and HAM projects
- WPI reference
- One month (was three months) before IPC month
- Bitumen
- Retail price on 1st day, one month before IPC month
- Reason
- Rise in fuel, material and logistics prices
Practice MCQs 2 questions
For what period does the cost escalation compensation mechanism for National Highway projects, announced on 2 April 2026, apply?
Show answer
Correct answer: A — 1 April to 30 June 2026
MoRTH said the measures apply for three months, from 1 April till 30 June 2026, or until further review.
Under the revised price adjustment for EPC highway contracts, the Wholesale Price Index will be taken for which period?
Show answer
Correct answer: C — One month before the Interim Payment Certificate month
MoRTH said WPI will now be taken for one month prior to the relevant IPC month, in place of three months prior.