Highway Construction Reached Record Speed Of 30.5 Km Per Day In FY21 From 25.2 Km Per Day In FY20 Despite Pandemic

The pace of highway construction touched the record high of 30 km per day mark in the fiscal year 2020-21 as compared to 28 km per day in 2019-20 despite the COVID-19 pandemic.

Adjusting for the first 20 days of April 2020 wherein no construction activity was allowed, the execution per day saw a growth of 21 per cent to 30.5 km per day in the first nine months of the current fiscal from 25.2 km per day day in the same period last fiscal.

In the past, it was only in 2018-19 that the pace of building of highways touched the 30 km per day mark.

Construction of one kilometre 10-lane highway is still measured as one km and the same holds true for 2-lane highway.

Reportedly, February-March period of the current fiscal is witnessing even speedier construction.

The minister for road transport and highways Nitin Gadkari has set the goal of achieving the pace of 40 km per day construction soon. The pace touched a record of 76 km a day in the week commencing 8 January, Financial Express quoted its sources as saying.

The recent slew of measures taken by the government - like shifting from milestone-based billing (typically ranging between 45-75 days) to monthly billing and release of retention money; performance security in proportion to the work already executed, etc. - have helped in reducing cash conversion cycle favouring the contractors. Hence, the increase in the construction pace.

“The recent relaxation of financial capacity and widening the definition of core sector (technical capacity) by including segments like hospitals, hotels, oil & gas, warehouses, among others, will drive more EPC players towards infrastructure projects, especially road, which is already overcrowded. The competitive intensity is expected to increase manifold. If the liquidity boosting measures are continued; this along with relaxation in qualifications for bidders could result in steep rise in execution- more than 40 km/day going forward,” said ICRA’s Rajeshwar Burla.

Finance Minister Nirmala Sitharaman provided the highest-ever Rs 1.18-lakh crore capital outlay for the ministry of road transport and highways Budget 2021-22.