While project awarding by the ministry of road transport and highways (MoRTH) is expected to increase in FY26 from a year before, it is likely to remain below the historical high of FY21-23, the ratings agency said.
Project awarding remained stagnant at 4,874 km during the first 11 months of FY25, compared to 4,872 km in the same period of FY24. It declined by 30.7% year-on-year to 8,581 km in FY24.
“The NHs are currently facing a period of slowdown, both in terms of project awarding and execution, driven by delays in appointed dates, land acquisition hurdles, increasing project complexities, heightened competitive intensity and execution woes,” said Maulesh Desai, director, CareEdge Ratings.
As of December 2024, projects with a bid project cost of over ₹40,000 crore have been waiting for over a year for their appointed dates. This, along with fewer project awards and execution hurdles, is expected to drag down the construction momentum.
Key factors behind execution delays include prolonged timelines for obtaining appointed dates, increasing share of greenfield expressways and highways, which complicate land acquisition, and unprecedented monsoon in FY25.To address some of these challenges, MoRTH issued revised guidelines, effective from June 1, to streamline pre-construction processes and reduce delays associated with appointed date issuance.”These reforms are expected to ease project execution to some extent, subject to timely and coordinated action by all stakeholders,” CareEdge Ratings concluded.
