Road network will be laid rapidly in FY 2025, ICRA said - the figure can reach 13,000 kilometres
The report said the pace of execution this financial year will be supported by a healthy pipeline of projects, increased capital outlay by the government and focus on completing projects by the Ministry of Road Transport and Highways (MoRTH). According to Icra, the project award pipeline of the ministry will be well above 45000 km by March 2024.
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Road construction in India is likely to grow 5-8 per cent to 12,500-13,000 km in the current financial year, after registering a strong 20 per cent expansion in 2023-24, rating agency Icra said on Tuesday.
The report said the pace of execution this financial year will be supported by a healthy pipeline of projects, increased capital outlay by the government and focus on completing projects by the Ministry of Road Transport and Highways (MoRTH). ICRA noted that road performance was impacted in H1FY24 due to prolonged monsoon in some geographies, impacting productive days.
According to ICRA, the ministry's project award pipeline will be well above 45,000 km by March 2024. It said the delay in Cabinet approval for the revised cost estimates of the Bharatmala Project Phase 1 (BMP) has significantly impacted the award in FY24. As a result, total awards declined by 31 per cent to 8,551 km in FY24 from 12,375 km in FY23.
ICRA noted that a comparable pattern was seen in FY 2019, before the most recent general elections, with a year-over-year decrease in project awards of over 67%. According to the rating agency, the hybrid annuity mode known as Build, Operate, Transfer (BOT) is the next most popular option after the engineering, procurement, and construction (EPC) mode, which accounted for 70–75 per cent of awards in FY20. It is.
