Government increases FY24 highway construction target to 14,000 km from 12,500 km

The federal government plans to boost the highway-building objective for the current year in light of the acceleration in road construction in the first quarter of fiscal year 2023–2024 (FY24).

Anurag Jain, secretary of the Ministry of Road Transport and Highways of India (MoRTH), announced that the 12,500 km target for road development for 2023–24 has been increased to 14,000 km.

The National Highways Authority of India (NHAI) has been assigned a target to develop 6,000 km of roads out of the 14,000 km, MoRTH will build another 6,000 km, and the National Highways & Infrastructure Development Corp will build another 2,000 km of roads, he continued.

In India, the rate of road construction increased 9.4% year over year in the first quarter of this fiscal year, according to data from MoRTH. In comparison to the 1,966 km of roads built in the same period last year, around 2,150 km were built in April through June. After starting out slowly in April, the rate of road building picked up dramatically in May and June, which increased the volume of construction for the quarter. Senior MoRTH officials stated that if it weren't for the early monsoon in some areas of the country, the pace of road construction would have been much faster.

Officials also stated that as part of its expanded road development plan for 2023–2024, the government is looking to increase road construction throughout Odisha, Tamil Nadu, Karnataka, Maharashtra, and Madhya Pradesh. Some roadway projects in these states were put on hold last year due to problems with land acquisition. We anticipate increasing highway building in these states now that these problems have been resolved, a senior MoRTH official stated. The pace of road development in India is likely to stay robust despite the approaching state assembly election in December, according to another official, as many projects that were previously stalled because of problems with land acquisition and payments have been resolved.

Nitin Gadkari, the minister of roads, had earlier directed officials to speed up construction from the current objective of 34 km per day to somewhere around 40 km per day. In advance of the impending Lok Sabha elections in 2024, the national government plans to accelerate highway construction throughout the nation. According to a government official, the road transport ministry will have spent 91% of its Rs 2,58,606 crore budgetary allotment by December of this year. He continued, As of May's end, the actual expenditure was Rs 59,078 crore.

In order to build roads in 2023–2024, MoRTH will favor a combination of engineering, procurement, and construction (EPC), hybrid annuity, and build–operate–transfer (BOT) modes. Despite the road ministry's confidence, analysts and industry experts predict that the rate of road construction will slow down in 2023–2024 compared to the previous year. In the years leading up to the general elections, ICRA Research anticipates a steep 25% decline in the amount of road sector projects awarded. In contrast to the approximately 12,000 km given in FY23, only about 9,000 km of roadways may be awarded in FY24, according to ICRA's assessment.

According to ICRA, the anticipated fall is comparable to the pattern experienced before the 2019 general elections, when awards dropped even more dramatically from over 17,000 km in 2018 to just under 5,500 km. ICRA predicts that road execution activity will expand by 16–21% on-year in 2023–2024 to 12,000–12,500 km, which is far less than the 14,000 km objective that the government is considering. In 2022–2023, the federal government succeeded in building about 10,993 km of national highways, falling short of its goal of 12,500 km. For the past two years, MoRTH has fallen short of its goal for building new highways.

The speed of building national highways in India reached its pinnacle during the pandemic-stricken years of 2020–21, when lockdowns aided in accelerating development, reaching a record high of 37 km every day and leading in the construction of a record 13,327 km of motorways. The road ministry had planned to build 14,600 km of roadways in 2021–2022, moving at a rate of 40 km per day. It then changed the target to 12,000 km, however the government was only able to build 10,457 km in 2021–2022. In a similar vein, the goal for 2022–23 was set at 12,500 km, notwithstanding Gadkari's earlier suggestion that 18,000 km of highway construction at a daily pace of 50 km might be taken into consideration.

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