Indian National Highways


Transition to Pure Project Organization (Through the Act of Parliament)

To overcome the difficulties that accounted for project failures, the ministry of transport has set up a separate project organisation – National Highway Authority of India in 1986. The NHAI is purely responsible for development and implementation of highways projects. This new organization is autonomous and empowered to undertake the execution of any project in any state.

The organisational structure of NHAI is given in Exhibit II. NHAI constitutes board of directors that includes members from Engineering, Finance, Administration, Technical, and Business Development areas.


Organisation structure of NHAI – Roles and Responsibilities

Chief General Manager (CGM)


He is the nodal Project Manager handling multiple projects. He has limited functional responsibilities and is more project focus.

Project Director

He is an Onsite Project Director reporting to CGM and controlling Contracting Agency issues.

Supervision Consultants

Supervision Consultant is an Engineer who is employed by NHAI, but has an independent organization for a single project. After the completion of the single project, his project team disbands.



As exhibited in Exhibit II, NHAI organisational structure eliminates public works department and introduces Supervision Consultant/Engineer Project Based Organisation. This model more resembles a pure project organisation approach in dealing the highway projects. MOT realised that if supervision consultant organisation was not appointed as an independent entity, the organisation of the chief general manager would expand, become difficult to manage and expensive to run. However, supervision consultant organisation is temporary and disbands after the project is accomplished. The organisation structure of supervision consultant is shown in Exhibit III.


The supervision consultant has been delegated the following tasks by the NHAI, reporting directly to NHAI chief general manager and also to NHAI onsite project director.

  • Review of detailed project reports during execution.
  • Supervision of execution of works undertaken by contracting agency.
  • Monitoring and controlling of work.
  • Certification of payments made to contracting agency.
  • Decision making regarding routine changes during the execution of works such as increase or decrease in the quantity of any item of works. However, he needs to refer back to NHAI for the approval in case decisions have to be made in regards to scope change, or variations having major changes not included in schedule of quantities of work.

We shall now see how NHAI structure has improved the problem faced by MOT of time and cost overruns in the projects.


  • Project Manager – Chief General Manager has full line management authority over the projects. He is like CEO of a firm dedicated to carrying out projects. While in MOT, decision making was escalated through the hirerachary causing delays.
  • The lines of communications are shortened. Decision making in terms of scope, specifications and cost changes are done by Project Manager – Chief General Manager, NHAI. In case of MOT, no such powers existed with Public Works Department who actually carried the execution responsibility.
  • Since projects are ongoing, NHAI is able to maintain permanent project focused experts and are able to develop skills in specific technologies.
  • NHAI is able to have a faster decision making life cycle, because:
  1. The need for change in scope is seen by Contracting Agency who communicates to Supervision Consultant.
  2. Supervision Consultant communicates to Onsite Project Director.
  3. Project Director communicates to Chief General Manager, who now delegates his own team – General Manager, Deputy General Manager and Supporting Staff for further investigation in the matter.
  4. The results will then be passed to Project Director Onsite, who can then take action.

Decision still has to move through various levels which can cause delays.

  • Motivation is high in NHAI as the each individual is appointed on the basis of project focus. Mainly the techniques of empowerment and intrinsic rewards are followed. Any extrinsic rewards like bonus or pay package is not allowed. Promotions are attached with the performance and hence become the major motivational aspect.
  • The structure is flexible and adapts to the changes and easy to implement.
  • Supervision consultant organisation is a temporary organisation and can disband. Because projects are ongoing, hence they can be re-allocated on new projects. NHAI can use multiple supervision consultant organisations since there are multiple projects and this leads to duplication of effort.


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