Slower project awarding and challenges in project execution is expected to drag down the pace of highway construction in the current financial year by 7-10% on year to 9,500-10,200 km, according to a report.
“The National Highways is currently facing a period of slowdown, both in terms of project awarding and execution driven by delays in appointed dates, land acquisition hurdles, increasing project complexities, heightened competitive intensity and execution woes,” the report by CareEdge Ratings said.
The execution pace witnessed an 8% decline during the first eleven months of the last financial year when compared with the same month of 2023-24 and it is envisaged to remain at 30 Km/day during FY26 as against 34 Km/day in FY24, Director of EareEdge Maulesh Desai said.
Even after more than three months of completion of the 2024-25, the government has not made the highway construction and award figures for the year. Award figures for the 11 month period of FY 25 stood at 4874 km while construction stood at 8330 km.
The national highways project awarding activity witnessed a 30% decline in FY24 and remained stagnant in 11 months of FY 25. In FY26, CareEdge Ratings expects an increase in project awards by the Ministry of Road Transport and Highways (MoRTH) over FY25 levels, albeit lower than the historical highs of FY21-FY23.
As of December 31, 2024, projects with a Bid Project Cost (BPC) exceeding Rs 40,000 crore have been awaiting their appointed dates for over a year since award, which, along with lower project awards and execution hurdles, is also expected to pull down the execution pace.
Execution hurdles can be attributed to prolonged timelines in receipt of appointed date, increased awards for greenfield expressways and highways complicating land acquisition issues, unavailability of hindrance-free Right of Way (RoW), a standard two-year construction period regardless of the project’s complexity,
MoRTH issued revised guidelines to streamline pre-construction processes and reduce delays associated with appointed date issuances. These reforms are expected to ease project execution to some extent, CareEdhe report said.