India’s road projects awards are likely to witness strong momentum in the next fiscal year. As the number of projects is expected to go up said a report by Axis Securities.
The bidding pipeline for road projects stands sizeable at Rs 1.1 trillion as of September 2024. This growth, the report is based mainly on two types of projects: the hybrid annuity model or HAM and engineering, procurement, and construction or EPC projects. HAM projects constitute 47% of the total pipeline, while EPC projects represent 36%. Furthermore, there could also be an increase in the share of build-operate-transfer or BOT-Toll projects, the report says.
“The pace of awarding roads is set to accelerate with a bidding pipeline of Rs 1.1 trillion driven largely by HAM projects,” the report said.
The acceleration in road projects award for FY25 is on account of the slower pace of awarded projects in FY24. This sets up the expectation for a spurt in activity in FY25 to make up for the shortfall caused by delays in the previous fiscal year. The NHAI has already set up a strong pipeline of tenders that will support the faster pace of project awards in the next fiscal year.
The Ministry of Road Transport and Highways (MoRTH) issued a new policy to ease the bidding process. According to this policy, they will not automatically cancel any highway project. Even if it receives only one bid in case the quoted price is reasonable. This is to prevent delays in the awards of projects in case of inadequate competition.
The report, however, added that any deceleration in project awards will impinge on growth prospects for road developers during FY26. However, it is currently overcoming this challenge with its diversified order book and strong bidding pipeline. This offers a supporting feature of stability and growth opportunities shortly.
This development in the road sector is now all set to proceed with its growth. The public and private sectors will actively accelerate project awards.
ANI
