Construction Industry News
The Indian National Highway Authority (NHAI) has raised more than 102,000 million, according to the Economic Survey 2022-23. Indian and foreign institutional investors will play an important role in meeting the ever-increasing fiscal support for the construction of a nationwide road network. According to the survey, the industry has seen an increase over time in the construction of national highways (NHs) and roads. In FY22, 10,457 km of roads were built, compared to 6,061 km in FY16. 4,060 kilometers of NHs and roads were built in FY23 (until October 2022), representing approximately 91% of the performance during the comparable period of the previous fiscal year. Over the past four years, total budget support for sectoral investments has risen rapidly to around 1400 billion by the end of FY23 (as of 31 October 2022)," the survey said.
Government funding for the construction of national highways has seen a significant decadal CAGR of 26 percent from 180,000 million in FY13 to 190,000 million expected for FY23BE. The NHAI has reached about 90 percent of its annual capex target of 134,0000 million by December 2022, according to ICICI Securities.
As of 29 December 2022, the Roads Ministry has built 5,337 kilometres of national roads (NHs), compared to the target of 12,200 kilometres for FY23. This results in a build speed of about 34 kilometers per day for FY23. In FY15, the speed of highway construction was 12 km per day, while in FY22 it was 29 km per day with 10,457 km per year built. It is possible that fundraising came about as a result of the government's plan to make public sector assets tradable. According to the statement, the National Highways Authority of India (NHAI) launched "InvIT" in fiscal year 2022 to not only facilitate the monetization of roads, but also to attract institutional investors from both India and abroad to invest in the road sector.
According to the survey, structural and financial reforms such as the establishment of special financing institutions (NaBFID), recapitalisation of other sectoral DFIs, the push to the PPP ecosystem through model concession agreements by line ministries and enabling the development of social infrastructure through the renewed Viability Gap Financing Scheme complement the programmatic approach to infrastructure.
