Construction of National Highways in India will likely reach only 32-34 km per day during the current fiscal year as input prices are expected to remain elevated, thus the projects hitting a speed bump in the first quarter of this fiscal year.
Rating agency Crisil on Monday said that it expects the pace construction for of highways to pick up after the monsoon.
According to Crisil report, several National Highways' projects hit a speed bump in the first quarter of this fiscal year, with awarding by the Ministry of Road Transportation and Highways (MoRTH), including the National Highways Authority of India (NHAI), falling a sharp 42 per cent year-on-year (YoY) to 969 km.
Construction also slackened, down 14 per cent YoY to 1,966 km, translating to 22 km per day, as a surge in input prices led to developers delaying procurement of materials. Also, some projects awarded last fiscal year are yet to start.
According to Aniket Dani, director, Crisil Research, the deceleration comes on the back of already weak road construction activity in the previous fiscal year, which declined 21 per cent to 29 km per day, from a high of 36.5 km per day seen in fiscal 2021, owing to an extended and uneven monsoon, and lower awarding of projects earlier.
Against this backdrop, awarding would need to scale up significantly in the next nine months to achieve the ministry’s ambitious target of constructing 50 km per day. The outlook, though, remains positive.
Awarding of prjects had touched a high of 12,731 km last year.
Crisil estimates that the ministry will award 12,000-13,000 km of national highways projects, largely under Bharatmala, in this fiscal year, with uptake spurred by developer-friendly measures under Atmanirbhar Bharat that have been extended till October 2022.