The sluggish pace of awarding of new highway projects for the past two years is expected to further bring down the pace of construction of new highways in the next financial year, according to a report.
Already due to elections and prolonged monsoon the government had scaled down the target for highway construction by 15% in 2024-25 to 10,4121 km. “Road execution by the Ministry of Road Transport and Highways (MoRTH) will decline by 5% in FY2026 to 9,500-10,000 km from the estimated road construction of 10,000-10,500 km in FY2025,,”the report by rating agency ICRA said.
The awarding during April-December 2024 was subdued at 3,100 km, which is at the same level as last year significantly lower than the 5,835 km project awarded during April-December 2023. ICRA foresees road awards in the range of 8,500-9,000 km in FY2025, similar to that of FY2024. However, there has been some improvement in project awarding from November 2024 and if it sustains should result in 9-11% growth during FY2026.
The National Highways Authority of India of India (NHAI) has raised Rs 83.53 billion through monetisation of highways through Toll Operate Transfer (ToT) mode this FY. Another ToT bundle will be monetised this year. Apart from another ToT bundle whose monetisation will be completed this financial year, the NHAI will raise around Rs 210 billion more from Highway Infrastructure Trust. Rest around Rs 100 billion from securitisation of stretches of Delhi Mumbai Expressway.
