PNC Infratech Ltd. shares declined 5.6% to ₹225.6 on Friday, August 7, following the National Highways Authority of India's action against the construction company. This represents the second consecutive session of decline, with the stock now down 11% over two days and 10% for the year. The extended decline reflects investor concerns over the financial impact of the toll suspension on the ₹4,850-crore Kanpur-Lucknow Expressway project and the potential long-term implications of NHAI's proposed disciplinary actions. However, the company has issued a clarification stating that it has not been either 'debarred' or declared a 'non-performer' by NHAI, with replies to notices being submitted to the regulatory authority.
According to a press release issued by the Ministry of Road Transport and Highways on August 5, NHAI has served a notice proposing to declare PNC Infratech a non-performer, which would make the concessionaire ineligible to participate in future NHAI bidding. The proposed action stems from the 300-metre pavement slippage observed on the Kanpur-Lucknow Expressway on July 26. Following the incident, NHAI initiated restoration work, ordered a comprehensive technical assessment and began disciplinary proceedings against stakeholders responsible for deficiencies in project execution and supervision. The proposed non-performer classification is significant because NHAI is one of the country's largest road project awarding authorities, and any restriction on bidding could affect PNC Infratech's ability to secure new orders in the highways segment.
NHAI has issued a show-cause notice proposing multiple actions against the concessionaire, including levy of a penalty equivalent to 2% of performance security and initiation of debarment proceedings of up to three years against the Head of Pavement/Highways and other responsible staff. The authority has also directed PNC Infratech to undertake complete rectification of the affected stretch at its own cost, currently estimated at around ₹3 crore, with no financial implication for the authority. Additionally, NHAI has proposed downgrading the concessionaire's Pavement Condition Index (PCI) rating, which could adversely affect its eligibility for future NHAI projects. The show-cause notice gives the company an opportunity to respond before any final action is taken.
The latest technical issue was detected near Korari in Unnao district at the approach embankment of a bridge, with damage reappearing near a previously repaired 20-metre stretch. According to Business Standard, NHAI Project Director Nakul Prakash Verma confirmed that the incident was reported on July 26, prompting immediate restoration work and traffic diversion. The authority has undertaken repairs along the entire 220-metre approach section, with traffic currently being diverted near the Korari toll plaza and expected to resume normal movement after repairs are completed. Out of a total length of 63 km, a slippage of about 300 metres was observed on July 26, as confirmed by the Ministry of Road Transport and Highways. The issue came to light after parts of the road began to cave in following the first rains after the inauguration.
NHAI has constituted an inquiry committee to examine the cause of recurring damage and engaged a team of experts led by Professor K S Reddy of IIT Kharagpur to investigate the causes of the slippage and recommend remedial measures. As reported by Business Standard, Verma clarified that technologies such as Automated Intelligence Machine Guided Construction (AIMGC) were used during construction but were not meant to predict future road damage. The authority has also issued a notice proposing to debar Theme Engineering Services Pvt Ltd, the project's independent engineer, from participating in future NHAI projects as part of corrective measures. A charge sheet is being issued against the former Project Director, Saurabh Chaurasia, during whose tenure substantial construction took place, and Verma for alleged negligence in the discharge of their responsibilities.
