Revamping Roads: Government Eyes Extending Road Contract Defect-Liability Period To 10 Years To Cut Maintenance Costs

In a bid to curtail road maintenance costs and enhance construction quality, the Ministry of Road Transport and Highways is contemplating doubling the defect-liability period under engineering-procurement-construction (EPC) contracts to 10 years.

The proposal aims to incentivise contractors to deliver higher-quality infrastructure.

As per reports by Economic Times, a senior government official, speaking anonymously, disclosed that consultations with stakeholders are underway to finalise the proposal.

The report also noted that the ministry is keen on bolstering construction standards to ensure long-term durability and safety of roads.

Under the present EPC mode, road maintenance responsibility shifts to the central government after the defect-liability period concludes.

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Financed through the Central Road Infrastructure Fund, maintenance works on national highways are executed by various agencies, including state public works departments, the Border Roads Organisation, National Highways Authority of India, and the National Highways & Infrastructure Development Corporation.

Jagannarayan Padmanabhan, senior director and global head of consulting at Crisil Market Intelligence and Analytics, emphasised the importance of defect liability in ensuring contractors prioritise long-term quality.

However, he cautioned that extending this period may expose contractors to unforeseeable claims.

Highlighting the progress under the Bharatmala Pariyojana, the government has awarded road projects totaling 25,713 km, primarily under the EPC mode.

Moving forward, the ministry intends to shift towards awarding larger projects under the build-operate-transfer (BOT) mode, where contractors assume maintenance liability.

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