Telangana's HAM Road Projects Come Under Scrutiny as Construction Costs Surge

Telangana's Roads and Buildings Minister Komatireddy Venkat Reddy has undertaken a detailed examination of the state's Hybrid Annuity Model (HAM) road projects, focusing on procurement procedures, cost overruns, and construction price escalations. The marathon review session took place at the State Secretariat on Monday, extending for three hours.

During the meeting, state officials presented comprehensive briefings covering project progress, budgetary considerations, quality benchmarks, and infrastructure development initiatives. The minister specifically requested thorough documentation on bidding processes, bid premiums, and the mounting expenses affecting project implementation.

Telangana has demonstrated relative restraint in bid escalations compared to counterparts across India, officials informed the minister. The Hybrid Annuity Model, introduced by the Ministry of Road Transport and Highways, has been rolled out by NHAI across multiple states since 2016, including Maharashtra, Gujarat, Tamil Nadu and Karnataka.

Across the nation, more than 374 HAM projects valued between Rs 4 lakh crore and Rs 5 lakh crore are currently in execution phases. Officials noted that Gujarat has experienced bid premiums reaching 66 percent, while Maharashtra has witnessed approximately 47 percent excess bids in comparable projects.

A significant portion of the review concentrated on sharply rising construction expenses. Bitumen, a critical material for road construction, has seen its price nearly double—climbing from Rs 44,000 per metric tonne at the tender stage to approximately Rs 89,000 per metric tonne at present. Officials attributed the cost pressures to multiple factors including GST levies, maintenance responsibilities, petroleum prices, and broader global economic circumstances.

In Telangana, the Roads and Buildings Department is executing 441 road development initiatives under HAM Phase-I. These undertakings span 6,092 kilometres distributed across 34 project packages, with a combined outlay of Rs 13,006 crore. The Panchayat Raj Department is simultaneously implementing 2,162 road works organized into 17 packages, covering 7,450 kilometres at a cost of Rs 6,250 crore.

The minister emphasized that robust road infrastructure serves as a foundation for industrial advancement, improved regional connectivity, and job creation prospects in Telangana. He reiterated the administration's commitment to developing infrastructure capabilities through strategic planning and rigorous quality oversight. Komatireddy indicated he would present the review's conclusions to Chief Minister A Revanth Reddy within the next two days for final deliberation.

R&B Chief Engineer B.V. Rao and other senior departmental officials participated in the review session.