The government awarded contracts for the construction of 589 km of highways in August — a sharp rise as compared to the April-July period when awards were given for a total of 563 km of roads.
The total 1,152 km of highway awards in April-August were 34% lower than the 1756 km awarded in April-August of last year.
The highway construction in April-August was 2,961 km, which is 7.3% lower than 3,196 km constructed in the same period of last year. The performance in highway building shows that while the election process impacted the award, the construction pace did not slacken. In the current fiscal, the ministry is targeting building 10,421 km of highways, which is 15% lower than last year.
“With improved clarity regarding order-awarding activity from the ministry of road transport and highways (MoRTH) in August 2024, project awarding is expected to gain momentum from September 2024 onwards. However, the overall project award will remain substantially lower than that of FY2021-FY2023 levels,” said Vinay Kumar G, vice president & sector head – corporate ratings, Icra.
Icra estimates road awards by the MoRTH at 8,500-9,000 km in FY2025, similar to last year’s awarding of 8,581 km. In 2022-23, the figure stood at 12,375 km.
The MoRTH has incurred capital expenditure of about Rs 1.06 lakh crore till August, which is about 39.13% of the budgetary capital outlay of Rs 2.72 lakh crore. The capital expenditure of the ministry in the same period last year was Rs 1.12 lakh crore.
Since assuming office, the new government has approved Rs 50,655 crore worth of highways of 936 km length. These projects are part of eight national high-speed corridor projects. By December, the cabinet is expected to clear Rs 2 lakh crore worth of projects.