National Highways Construction Pace to Decline by 7–10% in FY26: CareEdge
National Highway (NH) construction and awarding activity has witnessed a continued slowdown, according to a recent report by CareEdge Ratings. Project awarding declined by 30% in FY24 and remained stagnant in 11MFY25 at 4,874 km, compared to 4,872 km in the same period of FY24.
In line with its April 2024 report, “Work in Slow Progress,” CareEdge observed that execution pace dropped by 8% during 11MFY25, averaging 25 km/day versus 27 km/day in 11MFY24, and is expected to end FY25 at 30 km/day, down from 34 km/day in FY24.
While a modest rebound in project awarding is expected in FY26, it is likely to remain below the highs recorded during FY21–FY23. The execution pace is projected to further decline by 7–10% in FY26 on a year-on-year basis, amounting to 9,500–10,200 km or 26–28 km/day.
The deceleration is attributed to several persistent execution hurdles:
- Prolonged delays in appointed date issuance
- Land acquisition challenges, especially in greenfield projects
- Lack of hindrance-free Right of Way (RoW)
- Uniform two-year construction periods regardless of project complexity
- Unprecedented monsoons in FY25
As of December 2024, projects worth over ₹40,000 crore are still awaiting appointed dates more than a year after award. In response, the Ministry of Road Transport and Highways (MoRTH) has issued revised guidelines to streamline pre-construction activities. However, the effectiveness of these reforms depends on timely action by all stakeholders.
“The National Highways sector is currently facing a period of slowdown, both in terms of project awarding and execution, driven by delays in appointed dates, land acquisition hurdles, increasing project complexities, heightened competitive intensity, and execution woes. In line with CareEdge Ratings’ earlier expectation, the execution pace witnessed an 8% decline during 11MFY25 compared to 11MFY24 and is envisaged to remain at 30 km/day during FY25, as against 34 km/day in FY24.
Looking ahead, awarding activity in FY26 is expected to witness a modest rebound; however, it is likely to remain below the levels recorded during FY21–FY23. Given the slower project awarding coupled with heightened execution challenges, CareEdge Ratings expects the National Highways construction pace to further slow down by 7–10% in FY26 on a y-o-y basis over FY25 to around 9,500–10,200 km, reaching 26–28 km/day,” said Maulesh Desai, Director, CareEdge Ratings.
