Digital, AI focus to strengthen India's road to quality highways

India’s national highways have over the last 25 years grown more than twofold: from around 58,000 km to 146,145 km last year, making the network an engine for economic growth. 

The Ministry of Road Transport and Highways, which constructs and operates highways through agencies such as the National Highways Authority of India (NHAI), has seen its budgetary allocations rise significantly. Finance Minister Nirmala Sitharaman allocated Rs 2.8 trillion for national highways in FY25. 

In the last decade, investments in the national highways sector (public and private) have nearly sextupled to Rs 3 trillion in FY25. Covid-19 brought a fresh influx of public sector capital expenditure to spur an economy stalled by the pandemic. 

According to experts, private investments in the sector are critical for growth and modernisation. The sector is witnessing significant traction in both construction and operation through models such as Toll-Operate-Transfer, Build-Operate-Transfer, and Hybrid Annuity Model.

 

It has attracted diverse investors, ranging from infrastructure funds to global institutional players. India’s first national monetisation pipeline (NMP) saw the highways sector being one of the key contributors: NHAI achieved 71 per cent of NITI Aayog’s NMP Road Sector Pipeline from FY22 to FY25 (₹1.15 trillion achieved out of a target of ₹1.6 trillion).

 

In the second edition of the NMP, the government is likely to target a private sector investment of Rs 3.5 trillion in brownfield highways over the next five years.

 

“Although many states have come forward, the engagement in state highways is somewhat subdued. While the appetite remains strong, challenges such as extended land acquisition and various clearance timelines, regulatory complexities, and evolving macroeconomic conditions have moderately tempered the pace,” said NN Sinha, former NHAI chairman and now managing director at Rodic Digital and Advisory.

 

“For investment to broaden, what’s needed is continued policy stability, multiple contracting formats, flexible financing, and streamlined dispute resolution mechanisms thereby ensuring that private capital continues to drive India’s highways towards world-class standards,” he said.

 

The highway ministry’s India’s Basic Road Statistics report — it provides data only till 2019-20 — says that in 20 years, the length of state highways has grown by only 35 per cent to 178,749 km, in stark contrast to national highways (146,145 km).

 

Going forward, the government should focus on the use of digital tools, artificial intelligence, and data analytics to ensure transparent operations and efficient maintenance.

 

“Furthermore, integrating sustainability and green construction practices through the use of recycled materials, energy-efficient practices, or smart road infrastructure must become the norm,” said Sinha.

 

The rapid pace of highway development has brought about deficiencies in quality and planning, according to Jagan Shah, chief executive officer of The Infravision Foundation.

 

“While the EPC (engineering, procurement, construction) mode delivers quick results, it opens the door to corner-cutting, which affects future generations. Execution is not just about constructing something. It is also about how it is going to perform over its lifetime. We have to stop rewarding only speed,” he said at a panel discussion at the Business Standard Infrastructure Summit.

 

Earlier this year, NHAI sought to improve its planning by shifting to a quality-cum-cost method for selecting project planners, giving more weight to a technical score over bid price.