The Comptroller and Auditor General (CAG) of India lambasted the National Highways Authority of India (NHAI) for providing undue advantages to concessionaires and violating the sanctity of contracts. Allegedly, NHAI was indulged in making post-tender amendments favourable to private parties and granting them concessions beyond the scope of the contract agreement.

CAG found that such concessions in 20 projects have led to deferments of Rs 9,296 crore premium payable to NHAI between 2014 and 2019.
Any post-tender amendment is tantamount to debasing the entire tendering process. This is something unfair concerning other bidders.
The apex body also raised questions over the role of the Ministry of Road Transport and Highway (MoRTH) in violating cabinet secretariat guidelines pertaining to the circulation and approval of cabinet notes.
Under the Built-Operate-Transfer (BOT) mode, bids are quoted on a Viability Gap Funding (VGF) basis, which means a grant to support projects that are not financially viable but economically justified. In this, NHAI pays concessionaires. Bids can also be quoted in another mode in which concessionaires pay a premium to the highway authority. The audit looked at the deferment or rationalisation of premiums in projects and found that a proposal made to rationalise these premiums was modified in late development.

CAG came down heavily on the nodal highway body for ignoring its fiduciary responsibility and risking loss to the exchequer. It said that NHAI has failed to ensure adequate safeguards against the exchequer since modalities of guarantees were dependent on the discretion of the NHAI Board. Due to the sheer negligence of the authority, a higher project cost would lead the concessionaire to raise higher debt, eventually reducing its ability to pay the required premium.

Moreover, the auditor found money in the escrow account being invested in mutual funds by concessionaires. An outside party manages an escrow account to hold valuables on behalf of two agreeing parties until specified conditions are met during a financial transaction. CAG found that Rs 5,303 crore from these accounts were invested in mutual funds.