The NDA 2.0 government would like to speed up road construction projects but there are roadblocks in its way
In fiscal year 2019, the government’s road-building spree stumbled. The government fell short of its targets, both for awarding road projects as well as constructing 40kms of roads per day. The industry blames this partly on general elections which led to a slowdown in the government’s working. But there were other reasons too, chiefly the NBFC crisis which affected funding and developers becoming reluctant to bid.
With a new government in power and the Budget nearing, it would like to speed up road construction work. But here are some of the main constraints facing the sector: Timely land acquisition, adequate funding availability for projects, balance sheet constraints faced by road developers and a debate over the model of awarding projects (EPC, BOT or HAM). The government should take initiatives to expedite execution, as most companies are sitting on a healthy order book which at the industry level amounts to about two to three times their annual revenue.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.