Monday, June 21, 2021

Editor's Space



As they say, there is always a silver lining amid dark clouds… the worst seems to be behind us and the road infrastructure sector and allied segments can move forward with much more vigor and enthusiasm to be back on track. The same sentiments have been reflected by the Minister for Road Transport & Highways and MSMEs, Nitin Gadkari, during a recent webinar, where he emphasized that the Government is giving utmost priority to the development of infrastructure and has set a target of road construction of worth Rs.15 lakh crore in the next two years. He was confident in stating that the Ministry of Road Transport & Highways will achieve the target of 40 kms per day of highway construction in the current fiscal. Notably, the government is also permitting 100% FDI in the road sector.



If recent numbers are anywhere to go by, despite Covid-induced lockdowns and restrictions on mobility in a large part of the country, highway construction quadrupled in April this year to 853 km compared with the same month last year, which saw complete nationwide lockdown. The pace of construction has been a decent 28 km/day in April 2021, even as it declined by 61% month-on-month. According to data compiled by the Ministry of Road Transport and Highways (MoRTH), all implementing agencies including the National Highways Authority of India (NHAI) had constructed 210 km of national highways in April last year. In March 2021, a total of 2,189 km highway was built.



Highway construction touched an all-time high of 13,298 km in 2020-21 at a record pace of 36.4 km/day. Analysts attribute the record construction to a slew of industry-friendly measures that the government had proactively taken during the pandemic year, including those to ensure better cash flow to the contractors.



According to Crisil, NHAI awarded projects totaling 4,818 km last fiscal – a three-fiscal high – underlining the government’s focus on the infrastructure sector and the trend will continue in the current fiscal as developers will be able to free up capital through stake sales. NHAI has set an ambitious 4,600 km highway construction target for the current fiscal. Last fiscal, NHAI constructed a record 4,192 km, up from 3,979 km developed in 2019-20 and 3,380 km in 2018-19.



The stage is set ably supported by the government’s fast track approval mechanism. Now all eyes are on the companies to take the BIG LEAP OF FAITH and emerge victorious!




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