NHAI may miss highway construction target for FY23

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

Data from the Ministry of Road Transport and Highways (MoRTH) shows that only 4,766 km of the 12,000 km of targeted highways for fiscal year 2023 were built between April and November, marking a down nearly 7% compared to 5,118 km in the same period last year. .

Expressway construction is even slower this year than in 2020—the first year of the pandemic that caused widespread economic disruption.

This year, the slowdown is not only seen in the construction sector but also in the awarding of new contracts. NHI awarded 5,382 kilometers of highway between April and November, lagging behind more than 5,600 kilometers of roads awarded a year earlier. The lower awarding of highway contracts indicates a slowdown in the sector with contractors being less willing to take on projects.

With slow highway development, NHAI now faces the daunting task of building more than 50 kilometers of roads in the last four months of fiscal 2023, a feat never before achieved, to come close. than the annual target.

Although the government did not give any reason for the poor performance in highway construction this year, an official from the Department of Road Transport said the disruption was caused by Omicron waves and wind. An extended season prevented NHAI from completing its 12,000 km goal last year and the trend is likely to continue this year. However, the ministry still hopes to meet the annual target as agencies have been asked to speed up construction and the government is also running out of funds to complete the roads at a faster pace.

“The construction of the first half of the road is generally slow but we expect that the activity will pick up now, as was the case before, and milestones will be reached,” the official said, requesting anonymity. know.

But signals of a slowdown in India’s road sector seem to be getting stronger every day as higher inflation and rising lending rates also make it difficult for investors to invest in the country. Road projects tend to be delayed and inconsistent.

A second official in the ministry said the current development is in line with a three-year trend, in which construction works remained slow in the first six months but accelerated thereafter. “Even this year, we have reached more than 90% of our target as of November, meaning the shortfall could be as little as 1,000 kilometers and will easily be filled before the end of the fiscal year,” the official said. this said.

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

However, experts are skeptical about the ability to complete the work as 50 km of road will have to be built every day to reach the goal of 12,000 km in time, which will be a record for NHAI.

The government built 10,237 km of highways in the pre-pandemic period of fiscal year 20 at a speed of 28.04 km per day. This number increased significantly in the first year of the pandemic when the country was on lockdown, which indirectly helped speed up the construction process. That year (Fiscal Year 21), a record 13,327 km of highway was built at a speed of 36.51 km per day. Last year (Fiscal Year 22), the speed again dropped to 10,457 km at a speed of 28.64 km per day.

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