CRISIL Intelligence estimates that construction of national highways will be 9,000-10,000 km in 2025-26, while it is estimated to be 10,500-11,500 km in 2024-25, 12,349 km in 2023-24, 10,331 km in 2022-23 and 10,331 km in 2021-22. Will be 10,457 km. Even the road sector data from the National Highways Authority of India (NHAI) shows a significant slowdown in the allocation and construction of road projects.
Data on its website shows that in the six months of the current financial year and so far, 599 km of road projects have been awarded, much lower than the average award of 4,500 km year-on-year.
Moreover, the construction of road projects so far has been only 1,781.35 kilometers compared to the average construction of 5,000 kilometers.
A senior government official, who spoke on condition of anonymity, said there has been a slowdown in the first half of the current year as the ministry is focusing on streamlining processes to ensure quality and timely construction.
“However, the sector is expected to pick up pace in the second half, although the cumulative figures may not match previous years,” the official said.
NHAI’s share in the total national highway construction in the country under the Ministry of Road Transport and Highways (MoRTH) ranges between 45% to 50%, while other players include National Highways and Infrastructure Development Corporation (NHIDCL), MoRTH, Border Roads Organization (BRO) and State Public Works Departments (PWD), which together constitute the remaining 50%. An email query sent to the Ministry of Road Transport and Highways and NHAI has not received any response yet. press time. Aniket Dani, Director, CRISIL Intelligence, said, “The lack of awarding activity in the last two financial years has led to a slowdown in construction, which is expected to impact construction activity in the current financial year and possibly the next financial year as well.” Due to high land acquisition costs,” Dani said, adding that since FY2015, the focus has shifted towards completing existing projects, with no new projects awarded under the BMP.
Kuljeet Singh, Partner and National Leader, Infrastructure, EY India, said that 2025 has been a year of transformation for the highways sector. “A number of policy reforms are taking place to balance the interest of stakeholders, such as annual pass, reduction in WPI toll indexation, new build-operate-transfer (BOT) toll framework, less emphasis on hybrid annuity model (HAM) projects, transfer of existing highways to government-owned infrastructure investment trusts (InvITs),” he said. etc., which has affected the pace of construction.” “In the short term, through 2025, these initiatives are expected to slow the pace of construction and award of new projects,” he said.
However, experts are optimistic about a rebound as the government is betting big on world-class infrastructure to achieve the goal of a developed India by 2047. “However, in the long run, if policy reforms are streamlined and concluded in the current year itself, such initiatives can boost the growth of the sector by ensuring future policy to investors,” Singh said. “The strong pipeline of projects unveiled by NHAI for 2025-26, coupled with the favorable changes being made to the Model Concession Agreement (MCA), provides an optimistic outlook on the sector,” Dani said.
