National highway awards and construction remain buoyant in Q1

With the construction of national highways having hit a three-year high in fiscal 2021, the momentum is set to continue into fiscal 2022. 

The Ministry of Road Transportation and Highways (MoRTH), including the National Highways Authority of India (NHAI), awarded 1,681 km of national highway projects in the first quarter of fiscal 2022, slightly over the 1,658 km awarded in the same quarter last fiscal. 

Despite the nationwide lockdown to contain the COVID-19 pandemic, national highway awards rose 123 per cent year-on-year (YoY) in the first quarter of fiscal 2021. For fiscal 2021, national highway awards rose 22.5 per cent YoY to 10,965 km, a three-year high. 

As the high awards in the first quarter of fiscal 2022 show, the momentum is expected to continue into fiscal 2022, on the back of a pipeline of projects under Bharatmala and developer-friendly measures taken up by the ministry, according to CRISIL Ratings.

With regard to the pace of construction, the onset of the second wave of the pandemic led?to a slight dip in momentum as labour availability at construction sites was only between 65 per cent and 75 per cent in the months of April and May this fiscal. However, construction in the first quarter of this fiscal was still up 25 per cent YoY to 2,284 km, at a pace of 25 km per day. Even when compared with the first quarter of fiscal 2020, construction was up 6 per cent. 

Similar to fiscal 2021, which clocked record construction of 36.5 km per day despite pandemic, labour and supply chain-related issues, developers are expected to significantly ramp up the pace of construction after the monsoon season.