Home / News / India /  NHAI may miss highway construction target for FY23

The National Highways Authority of India (NHAI) may miss the road construction target for this financial year due to lacklustre performance in the first eight months of the year.

Data from the ministry of road transport and highways (MoRTH) showed that only 4,766 km of the targeted 12,000 km of highways for FY23 has been built during April to November, marking a decline of nearly 7% from 5,118 km in the same period last year.

Highway construction this year is even slower than 2020—the first year of the pandemic that saw widespread disruption in economic activity.

This year, the slowdown is being seen not only in construction, but also in award of new contracts. NHAI awarded 5,382 km of highways from April till November, lagging the more than 5,600 km of roads awarded a year earlier. Lower award of highway contracts is indicative of a slowdown in the sector with lesser appetite for contractors to pick up projects.

With sluggish activity on highway development, NHAI now faces an uphill task of constructing more than 50 km of roads during the last four months of FY23, a feat never achieved before, to reach closer to the yearly target.

While the government has not provided any reason for the weak performance in highway construction this year, an official in the road transport ministry said disruptions from the Omicron wave and a prolonged monsoon prevented the NHAI from completing the targeted 12,000km last year, and the trend seems to be continuing this year. But, the ministry remains hopeful of reaching the annual target given that agencies have already been asked to speed up construction and the government is also flush with funds to get roads completed at an accelerated pace.

“First half road constructions are generally slow but we hope that this activity will pick up pace now, as has been the case earlier as well, and goalposts would be reached," the official said requesting anonymity.

But signals of a slowdown in India’s road sector seem to be getting stronger with each passing day as higher inflation and rising loan rates have also made it difficult for investors to invest in road projects where returns tend to be delayed and inconsistent.

A second official in the ministry said the current development is in line with the three-year trend where constructions have remained slow in the first six months but picks up pace thereafter. “Even this year, we have reached more than 90% of the target up to November, meaning the shortfall may be just of 1,000 km that would be easily made up before the end of the fiscal," the official said.

The government is banking on new road constructions in Jammu and Kashmir and Ladakh, nearing completion at many places, to plug any gaps in construction this year. About 500 km of highways are also proposed to be completed in a few days.

However, experts are sceptical about the work being completed as 50 km of road would have to be built every day to reach the 12,000 km target in time, which would be a record for NHAI.

The government constructed 10,237 km of highways in the pre-pandemic period of FY20 at 28.04 km per day. This increased substantially in the first year of the pandemic when the country saw lockdowns, which indirectly helped speed up construction. That year (FY21), a record 13,327 km of highways were built at 36.51 km per day. Last year (FY22) the pace again slowed down to 10,457 km at 28.64 km per day.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout