Govt to use GST data to track subcontracting in highway projects: Nitin Gadkari

Union Road Transport and Highways Minister Nitin Gadkari announced on Wednesday that the government will utilize Goods and Services Tax (GST) data to monitor subcontracting layers in highway projects. The minister aimed to restrict the extent to which contractors can subcontract work, addressing concerns over excessively discounted bids leading to compromised quality.

At a Federation of Indian Chambers of Commerce and Industry (FICCI) event in New Delhi, Gadkari pointed out that excessive subcontracting is causing quality issues, with contractors sometimes providing flimsy excuses like rain for subpar work. He emphasized that while earning money is not a crime, contractors must maintain quality while executing their projects.

Gadkari clarified that with GST records, the government can now identify which GST was filed for specific work and by whom. Consequently, he issued an order establishing rules on the maximum percentage a contractor can subcontract. An example he cited was a recent incident in Pune, where a Punjab-Haryana contractor won a contract by bidding 40% below the estimate and later passed the work to another contractor after retaining a portion.

The second contractor, in turn, handed the work to a third, resulting in poor quality. Gadkari mentioned that the National Highways Authority of India (NHAI) chief general manager was asked to forfeit the contractor's bank guarantee and take actions to prevent future NHAI tender bids. Additionally, he attributed the issue to changes in technical qualification requirements, calling it a "mistake" and stating that he had liberalized and diluted technical qualifications to encourage new entrants into the sector.