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Given the government’s push towards infrastructure, key highway development mandates won by the Gujarat-based Adani Group and Dilip Buildcon augur well for the economy
Despite a global slowdown enforced by the COVID19 pandemic, India’s highway construction, unlike other infrastructure sectors, boomed in FY21 due to a slew of robust measures introduced by the government. High performance in this sector can be attributed to the government adopting industry-friendly strategies to boost liquidity and ensure relaxation of norms for bidders.
Relief measures introduced by the government also include assuring steady cashflow with bank guarantees to contractors like IRB developers, Adani Group in Gujarat along with facilitating speedy payments and clearing all the pending dues. For road and highway construction, land was made available to ensure uninterrupted construction activity.
Surpassing the last year’s numbers, the current financial year witnessed a record 13,298 kilometers for highway construction versus 10,240 kilometers in the financial year 2020. Infrastructure ventures recuperated only in the second half after the complete washout in the first half of FY21. After the lockdown was lifted, the traffic on highways went back to the pre-pandemic scale, though the air and railways traffic slacked.
Around 12,120 tenders were issued in the road construction sector in FY21, with a value of Rs 3.14 lakh crore. These tenders were commissioned by the leading government agencies such as NHAI, MoRTH, UPEDA and NHIDCL.
Though the ministry of road transport and highway (MoRTH) has not laid any target for the road and highway projects in the current fiscal, the expected speed of construction is said to be around 40 kilometers per day. The 2020-21 budget saw the highest-ever capital outlay of Rs 1.18 trn. Under the Rs 5.35-trn Bharatmala Pariyojana Project, more than 13,000 km of roads and 3,800 km of highways are under the construction process.
NHAI has been the pace-setter in the road construction domain. Despite the Covid-19 induced lockdown, the agency accorded 141 projects totaling to 4788 km in FY21. It also touched the highest-ever record of 4192 km of highway construction in a financial year.
According to the director and practice leader of the transport and logistics sector of Crisil Ltd, “NHAI acted as a facilitator for bank guarantees and payments while any kind of disputes (involving contractors) was resolved.” He further stated, “So, the contractors had to just mobilize people for these road projects (as everything else was handled by the government).”
Private infra giants such as the Gujarat-based Adani Group and Bhopal-based Dilip Buildcon have bagged numerous road construction tenders floated by the leading government agencies.
Adani Road Transport (ARTL), a subsidiary of one of the largest Indian conglomerates Adani Group – headquartered in Gujarat, won a Rs 1,160.10 crore NHAI project in Odisha for the development of 6-lane Badakumari-Karki section of NH-130-CD road. ARTL also has won a Rs 1,039.09 crore highway project from the National Highway Authority of India (NHAI) in Telangana.
Additionally, Adani Enterprises, with its roots in Gujarat, has undertaken the 4-laning of NH-365A HAM (hybrid annuity mode) project for Kodad to Khammam corridor of Telangana under Bharatmala Pariyojana.
Including this project, the Adani Group now has a total of ten NHAI projects in Gujarat, Telangana, West Bengal, Kerala, Odisha, Madhya Pradesh, Andhra Pradesh and Chhattisgarh. The road projects format falls under HAM, build-operate-transfer (BOT) and toll-operate-transfer models.
NHAI has also awarded IRB Infrastructure Developers Ltd. (IRB) with a Rs 828 crore project in Himachal Pradesh. The project is allocated for the reformation and upgradation to a 4-lane profile and strengthening the NH-20 (new HN-154) border of Punjab/Himachal Pradesh for the section of Pathankot to Mandi.
The total project wins for IRB Developers reached Rs 5,004 crore in the current fiscal with the company embarking on two highway projects in Himachal Pradesh and West Bengal.
Dilip Buildcon Ltd (DBL), one of the leading highway builders, secured a HAM project in Karnataka from NHAI worth Rs 1,137 crore. The contract falls under Bharatmala Pariyojana and pertains to 4-laning of Sanur to Bikarnakette belt of NH-169.
NHAI recently declared Dilip Buildcon as the lowest (L-1) bidder in the tenders floated for Tamil Nadu and Puducherry on Hybrid Annuity basis. Both the projects have the completion period of twenty-four months and operation period of fifteen years.
