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Home >News >India >Highway project awards during Apr-Oct rise rise 1.9x YoY

NEW DELHI: The length of national highway construction being awarded by the government has gathered pace in the current financial year. During April-October, 5,697 km highways have been awarded, up 1.9 times during the same period a year ago.

Highway construction is gradually gaining momentum and is close to last year’s timeline, a senior government official told Mint. As much as 4,628 km of roads have been constructed in the seven months of the current financial year, as compared to over 5,100 km during the same period a year ago, according to the official.

The target for the financial year 2020-21 is 11,000 km.

“Highway construction was severely affected in the beginning of the year (due to the lockdown).Things are getting better despite the covid-19 pandemic. This is also because of the series of steps and relief measures taken by the government after the imposition of the lockdown," the official said.

“The pace of highway construction has increased notably from the lows of 7 km/day in April’20 to 26 kms/day in September ’20. It touched a high of 33 km/day in Jun’20 and was 26 km/day in Sep ’20. The pace of construction however has seen fluctuations on a monthly basis. This could in part be attributed to seasonal factors that come to impact road construction," CARE Ratings said.

“With the monsoon season in various parts of the country running through May-Oct, road construction during these months slows down and pickups pace thereafter. The labour shortages consequent to the pandemic and the lockdown too have affected road construction," the ratings agency said in a note in October, adding that the rate of road construction is expected to gain momentum after monsoon season gets over.

The government has been taking steps to boost road construction, an indication of its focus on infrastructure creation, which is expected to have a multiplier effect on the Indian economy that has contracted to a multi-year low of 23.9%.

In the last few months, the government has taken several steps to support road contractors and ensure cash flow to them, including extension of time for construction period without imposition of any cost or penalty and enabling monthly payment to contractors for the work done, to support them amid covid-19 crisis.

Besides, the central government’s latest capital expenditure plans are expected to boost new and ongoing infrastructure projects. Last month, the Centre announced 37,000 crore additional capital expenditure— 25,000 crore for the Centre and 50-year interest-free loans of 12,000 crore for states. The 50-year interest-free loans can also be used for settling dues to contractors.

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