MoRTH to award 8,000 km road projects in FY25
ROADS & HIGHWAYS

MoRTH to award 8,000 km road projects in FY25

The Ministry of Road Transport and Highways (MoRTH) is set to award 8,000 km of road projects in FY25, a notable decrease from previous years. Between FY22 and FY23, MoRTH awarded an average of 12,500 km of projects annually, but this dropped to 8,581 km last fiscal and is expected to remain modest at 8,000 km this fiscal, according to a Crisil report.

The slowdown in project awards is attributed to several factors, including procedural delays in approving project cost estimates, restrictions under the model code of conduct before elections, and a shift as the government explores the build-operate-transfer (BOT) toll model alongside the existing EPC (Engineering, Procurement, and Construction) and hybrid annuity models (HAM).

This decline is impacting road construction firms, whose order books are expected to shrink to two times their annual revenue by the end of this fiscal, down from 2.3 times at the end of the last fiscal and 2.6 times in FY23. Consequently, revenue growth for these companies is expected to slow to 5-7% next fiscal, a drop from the 13% compound annual growth rate (CAGR) seen over the past five years.

However, some relief is anticipated due to the decline in prices of key raw materials like steel and bitumen, which are down 5-17% from their peaks in FY22. Since most projects are awarded on a fixed-price basis, this will help maintain operating profitability at a steady 13-14%, even as competition intensifies during project awards.

Looking ahead, while the Cabinet Committee on Economic Affairs recently approved highway projects totalling 936 km, timely approval and awarding of additional projects will be crucial for sustaining the sector's momentum. (Deccan Chronicle)

The Ministry of Road Transport and Highways (MoRTH) is set to award 8,000 km of road projects in FY25, a notable decrease from previous years. Between FY22 and FY23, MoRTH awarded an average of 12,500 km of projects annually, but this dropped to 8,581 km last fiscal and is expected to remain modest at 8,000 km this fiscal, according to a Crisil report. The slowdown in project awards is attributed to several factors, including procedural delays in approving project cost estimates, restrictions under the model code of conduct before elections, and a shift as the government explores the build-operate-transfer (BOT) toll model alongside the existing EPC (Engineering, Procurement, and Construction) and hybrid annuity models (HAM). This decline is impacting road construction firms, whose order books are expected to shrink to two times their annual revenue by the end of this fiscal, down from 2.3 times at the end of the last fiscal and 2.6 times in FY23. Consequently, revenue growth for these companies is expected to slow to 5-7% next fiscal, a drop from the 13% compound annual growth rate (CAGR) seen over the past five years. However, some relief is anticipated due to the decline in prices of key raw materials like steel and bitumen, which are down 5-17% from their peaks in FY22. Since most projects are awarded on a fixed-price basis, this will help maintain operating profitability at a steady 13-14%, even as competition intensifies during project awards. Looking ahead, while the Cabinet Committee on Economic Affairs recently approved highway projects totalling 936 km, timely approval and awarding of additional projects will be crucial for sustaining the sector's momentum. (Deccan Chronicle)

Next Story
Infrastructure Transport

JNPA Becomes First Indian Port to Cross 10 Million TEU Capacity

The Jawaharlal Nehru Port Authority (JNPA), located at Uran in Navi Mumbai, has become the first port in India to achieve over 10 million TEUs (twenty-foot equivalent units) in container handling capacity.With the recent expansion, the port now operates five container terminals with a combined capacity of 10.4 million TEUs, alongside two liquid and two general cargo terminals.Handling more than half of India’s container traffic, JNPA processed 7.05 million TEUs in 2024 and has moved 15.39 million tonnes of containers and 16.64 million tonnes of total cargo in the first two months of FY 2025â..

Next Story
Infrastructure Transport

Nod for Rs. 36.26 billion Expansion of Pune Metro Line 2

The Union Cabinet has approved the Rs.36.26 billion expansion of Pune Metro Line 2, adding 12.75 km of track and 13 new stations to improve east–west connectivity across the city.The project aims to link Pune’s urban core with rapidly growing suburbs, supporting the city’s rising demand for efficient and sustainable transport solutions. This expansion is part of Corridor 2 of the Pune Metro and includes two key routes: Vanaz to Chandani Chowk (Corridor 2A) and Ramwadi to Wagholi/Vitthalwadi (Corridor 2B).It will connect residential, IT, and educational hubs in areas such as Bavdhan, Koth..

Next Story
Infrastructure Transport

Assembly begins for ‘Nayak’ TBM on Thane– Borivali Twin Tunnel Project

The assembly of ‘Nayak’, the first of four Tunnel Boring Machines (TBMs) for the Thane–Borivali Twin Tube Tunnel Project, has commenced at the Thane site. Built by German firm Herrenknecht AG and deployed by Megha Engineering & Infrastructure (MEIL), the TBM marks a key milestone in Mumbai’s ambitious 11.8-km underground road corridor beneath Sanjay Gandhi National Park.The twin tunnels will reduce the Thane–Borivali travel distance by 12 km and decongest Thane Ghodbunder Road. ‘Nayak’, with a 13.2-metre diameter, is designed to bore through challenging geological conditions ..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?