Highway construction starts off with a good note in FY20

highway construction

The first two months of the new fiscal have been good for highway construction in the country, with the pace going up by 9.6% to 28.5 km/day during the April-May period, as against 26 km/day in the year-ago period.

Owing to a jump in the last quarter, construction clocked a pace of 29.21 km/day in FY19. As for project awards, the pace had slowed down in the last year of the National Democratic Alliance’s first term in power, with a total of 5,470 km of projects being awarded in FY19—the figure stood at 17,055 km in the preceding fiscal (FY18). According to the ministry of road transport and highways (MoRTH), the pace would accelerate further in the months to come. Road Transport and Highways Minister Nitin Gadkari has set a highway construction target of 40 km/day for the current fiscal.

The fast-tracking of projects has happened despite large private investors deserting the sector after their projects floundered due to lower-than-expected toll receipts. Banks too have been reluctant to resume lending to the sector for a considerable part of the Modi government’s stint in power.

The performance of MoRTH has improved from 13 km/day in FY19 to 15 km/day in YTDFY20. The ministry is largely implementing projects via the EPC route wherein the government bears all project costs. On the other hand, NHAI projects are increasingly being executed through the hybrid annuity model (HAM), an improved public-private-partnership (PPP) model in which the government bears 40% of project costs.

Source- www.financialexpress.com