Highway Construction Speed likely to slow down, But Government hopeful of surpassing the target

New Delhi, 22 Feb 2025 (TRT Staff): The government is facing a slowdown in highway construction over the next two years, with a reduction in new project awards in both the 2023-24 and current financial year. Despite this, the Ministry of Road Transport and Highways (MoRTH) remains hopeful of surpassing its 10,400 km construction target for the ongoing fiscal year, according to a recent report from The Times of India.

The decline in new project awards is primarily attributed to government directives that have restricted fresh approvals under the ‘Bharatmala’ program. Moreover, there have been no new major highway development initiatives introduced.

Meanwhile, an inter-ministerial panel overseeing major highway projects has recommended that the ministry approve bids only after securing 80%-90% of the required land and obtaining essential statutory clearances, including environmental and forest approvals. While this could lead to delays in project approvals, officials believe that it will help prevent complications during the construction phase, particularly with legal disputes.

For projects under the hybrid annuity model (HAM), where private players contribute 60% of the investment, agencies are required to secure 80% of the necessary land before beginning construction. In contrast, for engineering, procurement, and construction (EPC) model projects, where the government funds the entire cost, 90% of the land must be acquired before bidding can commence.

With a renewed focus on land acquisition and regulatory clearances, the ministry is aiming to streamline project allocation to mitigate future hurdles.
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