Construction of highway projects slowed, contracts awarded below target

New Delhi: The Ministry of Road Transport and Highways awarded contracts for only 370 km of highways in January, far short of the revised target of 10,000 km for 2023-24 with just two months to go. According to official data, Indian National Highways has issued contracts for the construction of 3,481 km of highways in 2024. Which is about 60 percent less than last year.

The ministry had targeted awarding contracts for 16,000 km in 2024, but the revised cost estimate for the Bharatmala project slowed down the pace. The ministry had raised the matter before the Union Cabinet in November. In which the ministry warned that awarding less contracts in this financial year will affect the future.

The ministry is considering issuing tenders for 10,000 km of roads. With Lok Sabha elections around the corner, the Center needs to award about 6,500 km of highway contracts in the next two months. In such a situation, experts believe that this contract is much higher than expected.

Experts believe that this contract will be huge. No change is expected in the award of the highway project in the next two months. In particular, the election code of conduct will come into effect in March and this will create hurdles for the ministry. 6,000-6,500 km contracts may be awarded this year.

According to experts, awarding a small number of contracts will not have any significant impact on the capital expenditure of the sector in FY25. Because there is a gap of 9 to 12 months between the awarding of tender and the start date of the project. Currently, work is progressing well on several projects. Its effect will be seen more in FY26 as fewer contracts are awarded.

This year, construction of highways started slowly but then started to pick up speed. Last month, 1,442 kilometers of roads were constructed, which is 40 percent more than in January last year.