New Delhi, July 17 -- Aggressive underbidding has emerged as one of the biggest risks to India's highway construction programme. While intense competition has helped lower project costs on paper, contractors quoting steep discounts have often struggled to execute projects, leading to delays, cost overruns, contract disputes and arbitration.

To address the problem, the Union road transport and highways ministry has proposed significantly tougher financial safeguards for contractors submitting abnormally low bids.

The move aims to improve bidding discipline without reducing competition and ensure that only financially capable firms take up large public infrastructure projects.

Mint explains.

The ministry of road transport and highways (...