The pace of national highway construction in India fell to 15.6 km a day in the second quarter of 2023-24 from 23.63 km a day in the first quarter of FY24 after heavy rainfall and elections in some states, officials told Moneycontrol.
On average, 20.23 km a day of highways were built in the six months ended September compared with 21 km a day in the five-month period ended August.
The National Highways Authority of India, the agency that develops, maintains, and manages national highways, and the Ministry of Road Transport & Highways combined to construct 506 km of national highways in September. That compares with 526 km constructed in August and 420 km built in July.
The ministry’s capital expenditure was Rs 1.23 lakh crore as of September 30, lower than the government’s estimate of Rs 1.8 lakh crore.
While the quarterly pace of road construction has fallen sequentially, at 3,702 km in H1, it is still higher than the 3,559 km built in the first six months of FY23. About 3,824 km of national highways were constructed in the first six months of FY22.
The government planned to spend 90 percent of its budgetary allocation of Rs 2,58,606 crore by December but heavy rains and elections in some states led to lower construction.
The ministry spent Rs 59,078 crore in the first two months of FY24. By the end of the first quarter, it had spent Rs 99,273 crore. By July-end, it managed to utilise Rs 1.01 lakh crore, which rose to Rs 1.12 lakh crore by August 31.
Elections ahead
Buoyed by the rise in the pace of construction in the first quarter, the Centre increased the highway-building target for this year to 14,000 km but that goal is now being reconsidered, officials said.
Experts said the pace of construction and awarding of projects is expected to slow down in the quarter ending March 2024 with general elections scheduled by May 2024.
Government agencies cannot award new projects after the Model Code of Conduct kicks in ahead of the general election, ICRA Research said. The Model Code of Conduct is enforced from the day the Election Commission of India announces the election schedule and is operational till the process is completed.
The code of conduct for the guidance of political parties and candidates is a set of norms evolved with the consensus of political parties who have consented to abide by the principles embodied in the said code and also binds them to respect and observe it in its letter and spirit.
ICRA Research expects the award of road projects to fall by 25 percent in FY24 in the run-up to the general elections. About 9,000 km of highways may be awarded in FY24 compared to over 12,000 km in FY23, ICRA said.
The expected decline is similar to the trend ahead of the 2019 general elections when about 5,500 km of road projects were awarded compared with over 17,000 km in 2018, ICRA said.
ICRA forecasts a 16-21 percent on-year increase in road execution activity to 12,000-12,500 km in FY24, compared with the government’s target of 14,000 km. The Centre constructed about 10,993 km of national highways in FY23, missing its target of 12,500 km.
The ministry has missed its highway construction target for the past two years.
The building of national highways peaked during the pandemic-hit FY21, when lockdowns helped accelerate construction, touching an all-time high of 37 km a day and resulting in a record 13,327 km of highways being built.
The road ministry initially aimed to construct 14,600 km of highways at 40 km per day in FY22. The goal was lowered to 12,000 km and eventually, 10,457 km of roads were built.
In FY23, the target was set at 12,500 km, even though road transport and highways minister Nitin Gadkari had suggested that 18,000 km of highway construction at a daily rate of 50 km could be considered.
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