Highway project awards lag behind target, affecting 2024-25 construction pace

The slow pace of highway project awards this fiscal year may impact construction in 2024-25. Against a 12,500 km target, only 2,595 km of highways have been contracted in the first seven months, compared to 5,007 km in the same period last year. The Bharatmala Pariyojana Phase-1, with approval for 34,800 km of National Highways, has awarded works for about 27,000 km with a total capital cost of Rs. 8.5 trillion. Of this, 14,300 km has been constructed, and the projects aim for completion by FY 2027-28.

The Ministry of Road Transport and Highways is reportedly considering an ambitious proposal for Bharatmala and working on Bharat Mala 2, a Rs 20 trillion 20-year project. It aims to construct 50,000 km of highways, including 30,000-35,000 km of fenced-off expressways. Despite constructing 4,474 km of national highways from April to October, compared to 4,060 km last year, the full-year target is set at 13,800 km, a 33% increase from the previous year.

The ministry has utilized Rs 1.6 trillion (64%) of its Rs 2.58 trillion capital expenditure allocation, with a goal to reach 91% expenditure by December, anticipating a slowdown in activity during the last quarter due to general elections.