Is highway execution at risk in India?

01 Feb 2019 CW Staff

The appointed date is the de-facto starting date of a project, when the NHAI hands over its contract letter to a developer or concessionaire. As on November 2018, CRISIL Research analysed 40 HAM projects amounting to 1,913 km (over 55 per cent of total HAM awarding that year), awarded by NHAI in fiscal 2018. In all, 3,400 km of HAM projects were awarded last fiscal. Its analysis indicates that many have achieved financial closure but most are still awaiting appointed dates on account of delays in land acquisition or regulatory clearances.

The firm’s interactions with stakeholders indicate that land acquisition for most of the projects awarded are in the advanced stage, but lenders will begin disbursements only after the mandatory 80 per cent land is at least at the 3G stage. “As per MOSPI, execution in NHAI projects increased 23 per cent YoY to 1,363 km in H1 FY2019. We expects the run rate to continue, with NHAI execution expected at 3,600-3,800 km in FY2019, albeit pending appointed dates would be a drag,” cities Hetal Gandhi, Director, CRISIL Research.

The situation with projects awarded under the engineering, procurement, construction (EPC) model is better than HAM. Typically, land acquisition is higher in EPC than HAM, because the NHAI gets an additional 150 days’ buffer on account of time taken by developers for financial closure. A sample of EPC projects awarded last fiscal shows that 54 per cent have started execution.

Some projects in the advanced stages of execution are yet to receive the balance right of way, potentially affecting execution. In case 100 per cent of land is not provided on time, road developers have two options: Await right of way from NHAI and execute projects once received, or, de-scope part of the project for which land is not available and adjust the project cost on a pro-rata basis. However, the outcome will depend on individual stretches and is finalised based on negotiations with NHAI.

CRISIL Research has lowered its execution forecast for the National Highways Authority of India (NHAI) projects for fiscal 2019 to 3,600-3,800 km from the earlier anticipated 4,300 km, but is still 22 per cent higher than fiscal 2018. The firm estimates around 800 km of execution is at risk this fiscal, as dated on November 2018, because many hybrid annuity model (HAM) projects are still awaiting appointed dates for a longer duration after they were awarded. The appointed date is the de-facto starting date of a project, when the NHAI hands over its contract letter to a developer or concessionaire. As on November 2018, CRISIL Research analysed 40 HAM projects amounting to 1,913 km (over 55 per cent of total HAM awarding that year), awarded by NHAI in fiscal 2018. In all, 3,400 km of HAM projects were awarded last fiscal. Its analysis indicates that many have achieved financial closure but most are still awaiting appointed dates on account of delays in land acquisition or regulatory clearances. The firm’s interactions with stakeholders indicate that land acquisition for most of the projects awarded are in the advanced stage, but lenders will begin disbursements only after the mandatory 80 per cent land is at least at the 3G stage. “As per MOSPI, execution in NHAI projects increased 23 per cent YoY to 1,363 km in H1 FY2019. We expects the run rate to continue, with NHAI execution expected at 3,600-3,800 km in FY2019, albeit pending appointed dates would be a drag,” cities Hetal Gandhi, Director, CRISIL Research. The situation with projects awarded under the engineering, procurement, construction (EPC) model is better than HAM. Typically, land acquisition is higher in EPC than HAM, because the NHAI gets an additional 150 days’ buffer on account of time taken by developers for financial closure. A sample of EPC projects awarded last fiscal shows that 54 per cent have started execution. Some projects in the advanced stages of execution are yet to receive the balance right of way, potentially affecting execution. In case 100 per cent of land is not provided on time, road developers have two options: Await right of way from NHAI and execute projects once received, or, de-scope part of the project for which land is not available and adjust the project cost on a pro-rata basis. However, the outcome will depend on individual stretches and is finalised based on negotiations with NHAI.

Infrastructure Energy

17 Dec 2025

Vedanta Aluminium Uses 1.57 bn Units of Green Energy in FY25

Vedanta Aluminium, India’s largest aluminium producer, recently reported consumption of 1.57 billion units of renewable energy in FY25, marking a significant milestone in its 2030 decarbonisation roadmap. The company also achieved an 8.96 per cent reduction in greenhouse gas (GHG) emissions intensity compared to FY21, reinforcing its leadership in India’s low-carbon manufacturing transition. During FY25, Vedanta Aluminium expanded its renewable energy portfolio through long-term power purchase agreements, strengthening its strategy to source nearly 1,500 MW of renewable power over the lon..

Real Estate

17 Dec 2025

Oberoi Group to Develop Luxury Resort at Makaibari Tea Estate

EIH Limited, the flagship company of The Oberoi Group, has announced the signing of a management agreement to develop an Oberoi luxury resort at the iconic Makaibari Tea Estate in Darjeeling. The project marks a key milestone in the Group’s long-term strategy of creating distinctive hospitality experiences in rare and environmentally significant locations. Established in 1859, Makaibari is one of the world’s oldest tea estates and is globally recognised for its Himalayan landscape, primary forests and exceptional biodiversity. Spread across 1,236 acres, the estate houses one of the world�..

Real Estate

17 Dec 2025

GHV Infra Secures Rs 1.09 Bn EPC Order in Jamshedpur

GHV Infra Projects Ltd, a fast-growing EPC company in India’s infrastructure and construction sector, has recently secured a Rs 1.09 billion work order in Jamshedpur, Jharkhand. Awarded by a reputed group entity, the contract covers end-to-end civil construction, mechanical, electrical and plumbing (MEP) systems, along with high-quality finishing works for a large building development. The project will be executed over a 30-month period, with defined benchmarks for quality, safety and timely delivery. The order strengthens GHV Infra’s footprint in Jamshedpur, a key industrial hub known fo..