The National Highways Authority of India has set a target to construct highway stretches with combined length of 5,060 kilometres in the current financial year, up from a record 4,882 km built last year.
“The pace of construction increased by 13% in 2022-23. The target for this year has been set even higher,” a senior official said.
Similarly, the NHAI aims to award highway projects of 6036 kilometres, up from 6003 km awarded in the previous financial year.
In 2022-23, National Highways Authority of India (NHAI) also launched 167 projects with a total length of 5,213 km. In all, 55,000 km of roads are under various stages of execution, according to an ICRA report.
In the first two months of this financial year, the NHAI has constructed 655.31 km of highways and awarded only one project of 22.42 km.
Capital expenditure by the NHAI for the development of the national highway infrastructure touched an all-time high of Rs 1.74 trillion in FY23, significantly more than Rs 1.58 trillion provided by the government. The extra of around Rs 15,000 crore came from project-based financing.
For this year, Rs 1.62 trillion has been set aside for the NHAI from the budget and the highway builder is aiming another Rs 15,000 to Rs 20,000 crore through private financing via special purpose vehicles for identified projects.
Total capital expenditure of the ministry of road transport and highways has been kept at Rs 2.58 trillion for FY24, up from the Rs 2.06 trillion spent last year.
Taken together with other models of financing highways apart from engineering, procurement and construction (EPC), where the NHAI spends all money, much more resources will be available for the highway construction this financial year.
Other modes of highway construction are hybrid annuity model (HAM) and build operate transfer (BOT).
In hybrid, concessionaires are paid by the NHAI in instalments, and in BOT, private developer pays the cost of construction and recovers his investment through toll.
Between 2007 and 2014, only BOT was used to build highways before it came to a grinding halt. In 2018-19 and 2019-20, no projects were awarded on BOT. Its share in total highway construction has gone down to less than 5% and the government wants to increase it to 10%.
The EPC is expected to remain the mainstay of highway construction this year too with a total share of 70-75% of total awards, according to the ICRA report.