Highway construction, contract awards dip in April

Construction and contract awards for highway projects have dipped in April 2022 compared with the same month in the previous financial year, despite government claims of front-loading the expenditure to provide a pivot to the economy.

Construction in the month of April this year at 578 kilometres is down from 853 kms constructed in the same month last year, according to data from the Ministry of Road Transport and Highways. Contract awards for highway projects too have come down in the month of April to 201 kms compared with 311 kms in the previous year.

The data points towards a lacklustre beginning to the year, despite the highway ministry being the key ministry in the ₹7.5 lakh crore capital expenditure programme of the government in the current financial year.

At ₹1,87,744 crore, capex allotment to the ministry of transport accounts for a fourth of the FY23 capital expenditure plan. It may be noted that the highway construction remained muted in 2021-22 as well with the total construction of road spanning ₹10,327 crore in 2020-21 – despite it being a year ravaged by the pandemic. The ministry had targeted per day construction of about 40 kms in FY22, but could achieve only 28 kms.

Officials in the ministry are of the view that the construction will pick up in the subsequent months on the back of the record highway contract award in the month of March. "Record contract for highways having length of over 5,000 kms have been awarded in March. Total contracts for over 12,000 km have been awarded in the last fiscal and once work begins on these stretches, construction will pick up."

As far as the utilisation of the FY22 central allocation is concerned, the ministry has used 82% of the funds by the month of February. Against the enhanced allocation of ₹1,21,250 crore in the FY22 revised estimate, the actuals up to February stand at ₹99,065 crore – 82% of the revised estimate.