Recently, the Ministry of Roads and Highways (MoRTH) has been running highway projects at speeds of 28.16 km per day from April 2020 to January 15, 2021, which is around 8 percent higher year-on-year.
“It could have been around 36 percent year-on-year if around 60 days of construction activity had not been lost during this period due to the lockdown led by Covid-19,” the report says.
“However, Ind-Ra believes that the 11,000 km target for FY21 could be achieved given that the environment is conducive to construction in the fourth quarter of FY21 and the execution rate for the remainder of the period 37.7 km per day is maintained. “
According to Ind-Ra, this target would be exceeded if you consider that an execution rate of 35.5 km per day, which was demonstrated in the previous fiscal year for the same period, was blocked in March 2020 despite the last 10 to 15 days.
“Additionally, MoRTH showed an execution rate of 76.3 km per day between January 8, 2021 and January 15, 2021. In addition, this pace is in line with MoRTH’s instructions to meet the overall goal of building 60,000 km of NHs by fiscal year 24 For which a minimum speed of 33 km per day would be required. “
In addition, the government had awarded 7,597 km of NHs by January 15, 2021, compared to the target award of 4,500 km for fiscal year 21 at a rate of 26.2 km per day.
“The labeling speed in FY 20 was 24.5 km per day (FY 19: 15.0 km per day) and the total length of the awarded roads is 8,948 km (FY 19: 5,493 km).”
According to the report, a steady pace in the award of road projects has ensured that road and road infrastructure remains a key focus for EPC actors.
These projects have contributed for the most part to the entire sector’s backlog of EPC players.
In addition, in FY21, the government’s increased focus on road and road infrastructure not only benefited construction companies, but was also a good medium for economic recovery in terms of job creation and improved demand in related sectors such as cement, steel and Logistics.
“Ind-Ra believes that the numerous measures taken by the central government to increase the participation of EPC actors in road construction contracts would further strengthen their order backlog in the road sector in the medium term.”
“These measures include reducing the performance guarantee requirements, relaxing the eligibility criteria and norms for projects offered for both EPC and hybrid annuity models or for build-operate transfer modes.”