NHAI encounters procurement delays for 'digital highways', new optic fibre cable tender expected

Optical Fibre Network

The National Highways Authority of India's plans for developing around 10,000 kilometres of Optic Fibre Cables (OFC) infrastructure, or “digital highways” across the country by 2024-25 have been pushed back as the Authority has failed to procure cables from the market for it in the last year, multiple officials in the know told Moneycontrol.

"Procurement of OFC has been limited so far, with the NHAI cancelling three tenders since April 2023," a senior government official told Moneycontrol.

He added that the last NHAI tender to procure OFC was cancelled in March 2024, after low participation by the industry.

"Only two players had bid under the tender to procure OFC that was opened in March 2024, and both participants had quoted bids much higher than the NHAI evaluation," the government official said.

Emails sent to the NHAI and Ministry of Road Transport and Highways of India remained unanswered till the time of publishing.

New tender

Following the cancellation of three tenders the NHAI has now started consultation with OFC manufacturers like Sterlite Technologies, HFCL and Aksh OptiFibre Ltd and is expected to come up with a new tender worth Rs 3,000 crore soon.

"They are currently trying to freeze models. Previously, they were contemplating a capex model, but now they are exploring PPP and build–own–operate–transfer (BOOT) models. The industry consultations will commence soon," a senior industry executive aware of the developments told Moneycontrol.

He added that the industry is eagerly awaiting NHAI's latest tender as the road authority's fibre network is expected to be easier to monetise as compared to BharatNet as this fibre network can be leased to data centres, hyperscalers and telecom operators.

Hyperscalers are large-scale data centres that specialise in delivering massive amounts of computing power and storage capacity to organisations and individuals.

Digital highways

The road ministry has been trying to launch "digital highways" in India since 2022 and around 1,367 kilometres on the Delhi-Mumbai Expressway and 512 km on the Hyderabad-Bengaluru corridor have been identified as pilot routes for the digital highway development.

However, the development of these digital highways has been hit by the NHAI's procurement hurdles.

The NHAI plans to use OFC to help telecommunications connectivity along the way, allowing, for instance, mobile network companies to use these to create tower relays and offer coverage along these routes. These fibre cable networks will also serve as a crucial backbone for 5G mobile telephone services.

Under the National Broadband Mission (NBM), which was launched in December 2019, the government has set a target of 70 percent fiberisation to take India’s fibre footprint to 5.5 million kilometres by 2024. However, India is yet to hit the 50 percent mark in laying OFC so far.

The project is also one of the key highlights of Prime Minister Narendra Modi’s flagship Gati Shakti programme, which is a common platform to remove red-tapism and multiplicity of authorities while expediting logistics projects. A senior road ministry official said the government has had several rounds of meetings with the Department of Telecommunications for the project.