"Anticipated Slowdown on the Horizon for NH Employment: NH Works Braces for Sluggish Period"

In a significant shift from the bustling construction scene of the past few years, the latter half of FY25 is expected to witness a slowdown in the development of national highways. This impending lull is attributed to a notable decline in the number of projects awarded in FY24, with only 2,817 km awarded by November 2023 compared to the previous year's 5,382 km during the same period.

The Ministry of Road Transport and Highways (MoRTH) addressed the situation, highlighting that achieving the targeted awards for FY24 hinges on expediting the approval of the revised Bharatmala Phase-1 project or exploring alternative programs.

Concerns are exacerbated by the impending model code of conduct for the Lok Sabha elections, set to be enforced from January to March 2024. This period typically accounts for 40-45% of road project awards in a given year.

Ashish Modani, Vice President and Co-Group Head (Corporate Ratings) at ICRA, expressed the agency's analysis, stating, "We went through MoRTH’s commentary. ICRA has maintained that the overall award in FY24 will be lower than last year." ICRA recently revised its forecast for MoRTH’s road awards in FY24, anticipating a decline to 7,000-7,500 km, marking a 40-43% decrease year-on-year from its earlier estimate of 9,000-9,500 km.

HBL