Fall in National Highway Project Awards May Slow Construction in the Next Two Years
The road transport ministry in India is facing challenges in its national highway development programme, as the awarding of new projects has significantly decreased in 2023-24. This slowdown in project awards is expected to impact the pace of construction over the next two years, as the ministry has revised its targets and adjusted its projections for future highway expansion.
In the current financial year, the government is hopeful of meeting its target of constructing 10,400km of national highways (NHs). As of mid-January 2025, approximately 6,000km of roads have already been built, and the pace typically accelerates during the fourth quarter (January-March), when construction efforts usually double. With this seasonal boost, the ministry is optimistic about surpassing its current target and potentially reaching 11,000km of construction by the end of the fiscal year.
However, the road ahead looks more challenging for the next two years, as the number of national highway projects awarded in the present financial year has been relatively low. Data from the road transport ministry shows that as of mid-January, only around 3,800km of projects have been awarded, a slight increase from last year but still far below the levels of previous years. This reduction in the awarding of new projects signals a potential slowdown in the overall highway development. The pace of highway construction is directly linked to the number of new projects that are awarded and subsequently implemented. Given that it takes at least two years for a highway stretch to be constructed from the award date, the decline in new projects will inevitably impact the completion timelines for future roads.
Despite these concerns, the road transport ministry is hopeful that it will be able to surpass last year’s award figure of 8,581km, having already made progress in the approval and bidding of several key projects in recent months. The revised target for 2025 is set at 8,000km, reflecting a more cautious approach considering the current slowdown. Historically, the national highway sector has experienced strong growth in project awards, with the ministry successfully awarding 10,964km in 2020-21 and 12,731km in 2021-22. In FY 2023, the total award figure was 12,379km. However, with the recent decrease in new project awards, the ministry has had to revise its expectations for the coming years.
One of the primary reasons for the reduced number of awards is the slower pace of project approvals and a reduction in the number of bids issued. Nonetheless, the ministry has worked to expedite the appraisal and approval process, addressing certain bottlenecks that had previously delayed project implementation. Officials remain hopeful that, with improved systems in place, the sector can regain momentum and continue contributing to the country’s infrastructure growth. While the slowdown in national highway projects may pose challenges, the government is committed to ensuring that the targets set for the current year are achieved. The hope is that the recent improvements in the approval and bidding processes will set the stage for a stronger highway development push in the coming years, allowing India’s road infrastructure to continue growing at a steady pace despite the short-term dip in project awards.
