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NHAI road awards at three-year low in first half of fiscal
ROADS & HIGHWAYS

NHAI road awards at three-year low in first half of fiscal

17 Oct 2022 2 Min Read CW Team
The National Highways Authority of India (NHAI) could award only 777 km of road projects in the first half of the current financial year (April-September), which is a three-year low, rating agency Crisil said. This is also a 60 per cent drop over the corresponding period last year.

The road building authority has floated tenders worth about 2,200 km so far this fiscal, which is 36 per cent higher than the corresponding first half of the last fiscal.

"Slackened pace of execution, and highly inflated prices of key input materials owing to uncertainties arising out of global geopolitical tensions, have acted as major impediments to contract awarding momentum," Crisil analysts said in a report released last week.

Considering the ramp-up that typically happens in the fourth quarter, awarding in the second half of the financial year is expected to improve substantially. Nonetheless, awarding for the full year is still likely to be moderate.

"We expect 4,800-5,200 km of awards this fiscal, much lower than the 6,306 km awarded last fiscal," the rating agency noted.

Of the 777 km awarded in the first half of this fiscal, hybrid annuity model (HAM) projects had a 51 per cent share, while engineering, procurement and construction (EPC) accounted for the rest.

"Sharp rise in commodity prices and complex project awards in difficult terrains warranted developers to seek a higher premium to maintain their margins," the report said.

See also:
NHAI invites DPR bids for Vizag flyovers
NHIDCL invites bids for upgradation of NH-217 in Meghalaya

The National Highways Authority of India (NHAI) could award only 777 km of road projects in the first half of the current financial year (April-September), which is a three-year low, rating agency Crisil said. This is also a 60 per cent drop over the corresponding period last year. The road building authority has floated tenders worth about 2,200 km so far this fiscal, which is 36 per cent higher than the corresponding first half of the last fiscal. Slackened pace of execution, and highly inflated prices of key input materials owing to uncertainties arising out of global geopolitical tensions, have acted as major impediments to contract awarding momentum, Crisil analysts said in a report released last week. Considering the ramp-up that typically happens in the fourth quarter, awarding in the second half of the financial year is expected to improve substantially. Nonetheless, awarding for the full year is still likely to be moderate. We expect 4,800-5,200 km of awards this fiscal, much lower than the 6,306 km awarded last fiscal, the rating agency noted. Of the 777 km awarded in the first half of this fiscal, hybrid annuity model (HAM) projects had a 51 per cent share, while engineering, procurement and construction (EPC) accounted for the rest. Sharp rise in commodity prices and complex project awards in difficult terrains warranted developers to seek a higher premium to maintain their margins, the report said. See also: NHAI invites DPR bids for Vizag flyoversNHIDCL invites bids for upgradation of NH-217 in Meghalaya

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