The National Highways Authority of India (NHAI) is targeting 5,000 km of highway construction in the current financial year, which is 22% lower than last year, a senior official said.
Last year the highway development arm of the Ministry of Road Transport and Highways (MoRTH) had constructed 6,444 km of highways which was 20% more than 5,544 km constructed in 2022-23.
So far NHAI has constructed 762.3 km of highways. For April-May, the overall highway construction stood at 1,288-km as against 1,465-km in the same period of 2023-24
The scaling down of targets can be attributed to the slowdown in construction and award of new projects as the model code of conduct was in force for the better part of the first quarter of the financial year.
During April-May no new projects were awarded due to the model code of conduct while in the same period of last year the award figure stood at 382 km.
The NHAI has not finalised the target of award of new projects as the finance ministry had directed the MoRTH in October to halt award of new works and contracts under Bharatmala. This restriction was imposed on the flagship highway development programme Bharatmala as it had overshot the budget and completion deadline and the Finance Ministry wanted the highways ministry to take fresh approvals from the cabinet.
Now the ministry is awaiting approval for its National Masterplan for highway development before the awarding can pick up.
While the masterplan awaits clearance from the cabinet, the NHAI has decided to go big on attracting private investment in highway development through the Build Operate Transfer (BoT-Toll) model. It has identified Rs 2.1 trillion worth of 53 highway projects to be given to private developers. These stretches have a total length of around 5214 km.
Bids for eight highway stretches totalling 297 km have already been invited. To make BoT more attractive for private developers the MoRTH has come out with a new Model Concession Agreement (MCA).
Analysts, however, say that India’s road construction will likely grow 5%-8% to 12,500 km-13,000 km in fiscal 2025 following a robust expansion of around 20% in fiscal 2024. This pace of execution will be supported by a healthy pipeline of projects, increased government capital outlay and greater focus on project completion by MoRTH.
The ministry’s project award pipeline is healthy, at above 45,000 km as of March 2024 despite the slowdown in awarding seen in FY 24..
Other road building arms of the MoRTH are the National Highways & Infrastructure Development Corporation Ltd (NHIDCL) and the Road Wing of the ministry.
NHIDCL builds, maintains and operates national highways and strategic roads including interconnecting roads in parts of the country which share international boundaries with neighbouring countries.