Elevated commodity costs have slowed building of nationwide highways within the first quarter of the present monetary 12 months. The tempo of building stood simply at 22 km a day within the quarter, lower than 25 km a day recorded in the identical interval final fiscal. The tempo was 29 km per day in the entire of FY22.
The present 12 months’s building pace nevertheless is larger than recorded within the pandemic-hit first quarter of FY20.
For the 2022-23 fiscal, the ministry of street transport and highways (MoRTH) has set an “aspirational target” of constructing highways at 50 km a day. It interprets slightly over 18,000 km for all the fiscal.
During the April-June interval of the present 12 months, round 2,000 km freeway has been constructed by all implementing companies together with the National Highways Authority of India (NHAI), sources mentioned.
Officials within the ministry mentioned that the tempo of building will choose up within the third and fourth quarters of the present fiscal, as all the time.
Analysts, nevertheless, mentioned the decline within the tempo of building within the first half of the present fiscal is especially because of elevated costs of building supplies like cement, metal and bitumen. They additionally consider that at the same time as the worth of such commodities have began colling off in latest occasions, the onset of the monsoon would possibly impede the tempo of building within the subsequent two months or so.
“Notwithstanding the price escalation clauses in the agreement; the high volatility in commodity prices after witnessing a huge increase in H2 FY2022 has made some of the contractors to be on a wait and watch mode. Consequently, this has affected the pace of execution in the first two months,” mentioned ICRA’s Rajeshwar Burla.
“With prices of some of the major commodities like steel etc. cooling off in last couple of weeks, the pace of execution should improve. However, unfortunately now we are heading into monsoon season and therefore it may not result in tangible improvement in execution pace,” he mentioned.
Highway challenge awards additionally declined to only 969 km within the April-June interval of the present fiscal as in opposition to 1,681 km in the identical interval final fiscal and 1,658 km a 12 months earlier than. MoRTH targets to award 18,000 km freeway challenge size within the present fiscal as nicely.
Source: www.financialexpress.com”