Road Awards by MoRTH to Decline by 40-43% YoY in FY24: ICRA

ICRA has revised its FY2024 projection for road awards by the Ministry of Road Transport and Highways (MoRTH) to 7,000-7,500 km, reflecting a significant YoY decline of 40-43%. The 7M FY2024 road awards totaled 2,595 km, marking a 48% decrease compared to the same period in FY2023. With potential impacts from the model code of conduct during General Elections, further curtailment of awarding activities is anticipated. However, robust road execution is expected to increase by 16-21% YoY to 12,000-12,500 km in FY2024, driven by a substantial backlog, increased government capital outlay, and a focus on project completion before the elections. The preference for the EPC model remains, while BOT (Toll) projects are gaining attention for their lower funding requirements from the ministry. The BOT-Toll mode's share is expected to remain under 5% in FY2024, with NHAI identifying approximately 900 km for awarding under BOT (Toll), potentially spilling over to FY2025.