The project cost under the Bharatmala Pariyojana (BMP) programme has more than doubled to Rs 10.64 trillion owing to the steep rise in input costs and an increase in land acquisition costs, rating agency ICRA said on Monday.
Bharatmala Pariyojana is the largest highway infrastructure programme in India which aims at the development of 34,800 kilometres of national highway corridors at an investment of Rs 5.35 trillion.
"Pending the cabinet approval for the revised cost of Bharatmala Phase-l, project awarding activity in the recent quarters took a beating, declining by 48 per cent YoY to 2,595 km during 7mFY2024 compared to 5,007 km during 7mFY2023," it said.
The figures are for the first seven months of this fiscal compared to the year-ago period.
ICRA said it expects the awarding activity to contract over 30 per cent YoY (Year-on-Year) in FY2024.
Giving more insights, ICRA VP & Co-Group Head Ashish Modani said almost 95 per cent of the road awards by the Ministry of Roads and Transport and Highways (MoRTH) in the last five years were awarded through the hybrid annuity mode (HAM) and the engineering, procurement and construction (EPC) route, wherein the entire funding burden lay on the ministry.
"The burden on MORTH in case of BOT (Toll) projects is much lower, given the substantial cost escalation in the BMP and consequent increase in funding requirement," he said, adding that the MORTH has thus shifted its focus on to BOT (Toll) projects.
ICRA said while the average number of bidders for the EPC and the HAM projects stood at 15 and 8, respectively, in the case of BOT (Toll), it remained below 5.