Highway project award surges 70% in FY18: Report

The government has awarded highways projects worth Rs 1.2 lakh crore for 7,400 km in 2017-18 and the trend is likely to be continued in the current and next fiscal, rating agency Crisil said today.

The construction project award by the National Highways Authority of India (NHAI) surged 70 per cent to an all-time annual high in fiscal 2018, spanning 7,400 km and valued at Rs 1.2 lakh crore.

In 2016-17, projects worth Rs 59,000 crore were awarded for 4,300 km.

"Crisil Research expects both the award and execution of projects to be even faster in fiscals 2019 and 2020 if the NHAI manages to source funds on time, and over and above the budgetary allocation," the rating agency said in a statement.

Of the total length awarded by the NHAI in fiscal 2018, 51 per cent was through the engineering, procurement and construction (EPC) mode, 46 per cent through the hybrid annuity model (HAM) and the balance through build-operate -transfer (BOT) - toll mode.

Prasad Koparkar, Senior Director, Crisil Research said, "Majority of the EPC projects were bid out at par or well below the NHAI's request for proposal (RFP) cost in some cases, even 20-25 per cent lower. On the other hand, under HAM, most of the projects were won above NHAI's RFP cost, some even 45-50 per cent higher".

The statement said the contract awarding momentum, interestingly, was muted in the first three quarters of fiscal 2018 at 1,700 km, and which mainly comprised EPC projects. Most of the HAM projects were bid out in January-March.