Road construction in India to witness 7-10 percent slowdown in FY25
ROADS & HIGHWAYS

Road construction in India to witness 7-10 percent slowdown in FY25

The pace of road construction in India is expected to witness a 7-10 percent decline in 2024-25 with daily construction estimated at 31 km per day from 34 km per day in 2023-24 due to heightened challenges in execution, CareEdge Ratings said, which will result in the national highways construction to slow down to 11,100 km to 11,500 km in this financial year as against 12,350 km in FY '24.

Increasing project complexities, rising participation of moderate creditworthy sponsors and significant delay in the receipt of appointed date post award of the project are expected to pull down the execution pace to around 31 km per day, it added.

According to the agency, with the announcement of Greenfield expressways and highways, challenges towards land acquisition have aggravated, thereby elongating receipt of the appointed date.

It said that the permissible execution span for projects is uniform at two years, irrespective of the project scope whether brownfield or Greenfield expressway, which has further contributed to project delays.

All the above factors increased the project completion cycle from earlier 2.75-3.25 years to around 3.50-4 years presently, resulting in a higher turnaround time for project execution and a subdued execution pace.

The agency further said that the expected shift in awarding preference from engineering, procurement and construction (EPC) to hybrid annuity model (HAM) and toll projects in the medium term will lead to a 25-30 percent reduction in the share of EPC projects going forward, which will help reduce the funding requirement for NHAI while focusing on the quality of construction.

The pace of road construction in India is expected to witness a 7-10 percent decline in 2024-25 with daily construction estimated at 31 km per day from 34 km per day in 2023-24 due to heightened challenges in execution, CareEdge Ratings said, which will result in the national highways construction to slow down to 11,100 km to 11,500 km in this financial year as against 12,350 km in FY '24.Increasing project complexities, rising participation of moderate creditworthy sponsors and significant delay in the receipt of appointed date post award of the project are expected to pull down the execution pace to around 31 km per day, it added.According to the agency, with the announcement of Greenfield expressways and highways, challenges towards land acquisition have aggravated, thereby elongating receipt of the appointed date.It said that the permissible execution span for projects is uniform at two years, irrespective of the project scope whether brownfield or Greenfield expressway, which has further contributed to project delays.All the above factors increased the project completion cycle from earlier 2.75-3.25 years to around 3.50-4 years presently, resulting in a higher turnaround time for project execution and a subdued execution pace.The agency further said that the expected shift in awarding preference from engineering, procurement and construction (EPC) to hybrid annuity model (HAM) and toll projects in the medium term will lead to a 25-30 percent reduction in the share of EPC projects going forward, which will help reduce the funding requirement for NHAI while focusing on the quality of construction.

Next Story
Infrastructure Energy

Gujarat Adopts Tariff for Solar Projects

Gujarat has taken a significant step in its renewable energy journey by adopting tariffs for solar projects, reflecting its commitment to sustainable energy sources. This move aligns with global efforts to transition towards cleaner and greener power generation. Gujarat's decision to adopt tariffs for solar projects underscores its proactive approach to harnessing solar energy's potential. This initiative is part of the state's broader strategy to promote renewable energy and reduce reliance on traditional fossil fuels. The adoption of tariffs for solar projects in Gujarat signifies a pivotal ..

Next Story
Infrastructure Transport

Bihar's Railway Goes Solar, 10 MW Projects

Bihar's railway sector is undergoing a significant transformation with the implementation of 10 MW solar projects. These projects mark a pivotal shift towards sustainable energy practices within the state's railway infrastructure. The primary objective behind these initiatives is to reduce the carbon footprint of railway operations while simultaneously enhancing operational efficiency. The adoption of solar energy in Bihar's railway network reflects a broader commitment to environmental sustainability. By harnessing solar power, the railway aims to minimize its reliance on conventional energy ..

Next Story
Infrastructure Energy

GPCL Issues Consultancy for Storage Project

In a strategic move towards bolstering its energy storage capabilities, Gujarat Power Corporation Limited (GPCL) has issued a consultancy tender for a storage project. This initiative reflects GPCL's proactive approach in adopting advanced technologies to address the evolving needs of the power sector. The consultancy tender marks a crucial step towards integrating efficient energy storage solutions, ensuring a more resilient and sustainable power infrastructure. The storage project, facilitated through the consultancy tender by GPCL, signifies a shift towards innovative solutions for storing ..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000

Join us Telegram