Higher competition in road sector can impact quality: India Ratings and Research

Higher competition in the road sector could impact the building quality, said India Ratings and Research (Ind-Ra).

Ind-Ra said that increased competition in the road sector in FY21, resulting from the National Highways Authority of India’s (NHAI) initiative to reduce prequalification requirements, may ultimately lead to a moderation in the quality of roads.

“Along with higher order inflows, the sector has also witnessed an increase in competition, resulting in lower-than-expected bid prices,” the agency said in a report.

“The NHAI’s stated plan of action to monitor the execution closely, especially in cases of abnormally low bids, needs to be implemented strictly to maintain the quality of roads,” it added.