Construction stocks gain after CCEA approves national highways improvement project

Shares of ten construction companies rose by 0.06% to 5.79% at 11:00 IST on BSE after Cabinet Committee on Economic Affairs approved National Highways Interconnectivity Improvement Project in five states.

The announcement was made after market hours yesterday, 24 August 2016.

Meanwhile, the S&P BSE Sensex was up 62.91 points or 0.22% at 28,122.85.

Hindustan Construction Company (up 5.79%), J. Kumar Infraprojects (up 5%), Lanco Infratech (up 2.52%), IVRCL (up 2.94%), IL&FS Transportation Networks (up 2.57%), L&T (up 0.41%), Valecha Engineering (up 1.16%), Patel Engineering (up 1.65%), NCC (up 0.06%) and Unity Infraprojects (up 1.06%) gained. IRB Infrastructure Developers fell 0.59%.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, approved development of 1,120 kilometers of National Highways in Karnataka, Odisha, Bihar, Rajasthan and West Bengal.

The work for development to two lane standards are under phase-I of the National Highways Interconnectivity Improvement Project (NHIIP) with World Bank assistance. The revised estimated cost of the project is Rs 6461 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The projects are already taken up for implementation and 429 kilometers has been completed. The civil works are expected to be completed by July 2019 and maintenance works are expected to be completed by July 2024.

The project will ensure safe, fast and all weather movement of traffic on the proposed National Highways mostly located in backward regions thereby improving socio economic development.

The proposal was initially approved for Rs 5193 crore. The cost has increased due to higher bid prices, and increase in cost of land acquisition, resettlement and rehabilitation and other pre-construction activities.

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