India Aims for 40 km of Highway Construction Daily in Two Years

30 Aug 2024 CW Team

India is on track to achieve its ambitious target of constructing 40 kilometers of highways per day within the next two years, according to Bhavik Damodar, Partner at Deloitte India. Damodar emphasized the strong momentum from the central government, noting that the necessary ecosystem and construction capacity are already in place.

"If land acquisition and regulatory issues are promptly addressed, reaching the goal of 40 kilometers of road construction per day in the next 24 months is achievable," Damodar stated.

Discussing upcoming highway projects, Damodar indicated that future contracts would predominantly follow the EPC (Engineering, Procurement, and Construction) and HAM (Hybrid-Annuity Model) frameworks, with fewer projects using the BOT (Build-Operate-Transfer) model.

While EPC projects require substantial government funding, they offer opportunities for monetization under the TOT (Toll-Operate-Transfer) model. "The Union government is focusing on many corridors using the EPC model, with plans to transition some of these projects to TOT later," Damodar explained.

The government's commitment to infrastructure development is evident in recent announcements made in the Union Budget. Finance Minister Nirmala Sitharaman has unveiled plans for several major road projects, including the Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, and road connections to Bodhgaya, Rajgir, Vaishali, and Darbhanga in Bihar, with an estimated total cost of around Rs 260 billion.

Additionally, the budget has allocated Rs 11111.11 billon for infrastructure capital expenditures over the next five years to ensure continued robust support for the sector.

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