NEW DELHI: Industry experts are expressing considerable optimism about the future of India’s roads and highways sector, forecasting an influx of nearly Rs 3 lakh crore worth of projects in the near term.
This positive outlook is buoyed by significant developments in the sector, particularly the National Highways Authority of India’s (NHAI) monetisation initiatives and the government’s strategic project pipeline. ICRA, a leading credit rating agency, has projected that NHAI’s monetisation efforts could generate approximately Rs 60,000 crore in FY25. Concurrently, India Ratings & Research has highlighted that the government has earmarked 53 projects, valued at Rs 2 lakh crore, set to be bid out in the coming years. These projects will follow the build-operate-transfer (BOT) model, which underwent revisions last year to address industry concerns.
The modifications to the BOT norms were necessitated by the withdrawal of several large companies from the sector. These companies cited delayed returns on investment (ROI), inflexible concession agreements, and legal disputes with the government as primary reasons for their exit. The revamped norms are expected to create a more favourable environment for investment and participation. ICRA further estimates that the monetisation of 33 road assets through toll-operate-transfer (TOT) and Infrastructure Investment Trust (InvIT) mechanisms holds a potential of Rs 53,000 – 60,000 crore. This could translate into a lending opportunity of Rs 38,000-43,000 crore for banks and capital markets. Moreover, ICRA anticipates that the Ministry of Road Transport and Highways (MoRTH) could achieve up to 71% of its Rs 1.6 lakh crore monetisation target under the National Monetisation Pipeline (NMP) by the end of FY2025.
The NMP envisages that road sector monetisation will account for Rs 1.6 lakh crore, representing 27% of the total monetisation target during FY2022-FY2025. By the conclusion of FY2024, NHAI and MoRTH had realised approximately Rs 0.53 lakh crore (33%) through TOT and InvIT modes, according to ICRA. These developments underscore the substantial opportunities within the roads and highways sector, driven by strategic government initiatives and enhanced investment frameworks. The anticipated projects and monetisation efforts are poised to significantly bolster India’s infrastructure, paving the way for sustained economic growth and development. As the sector continues to attract investment, stakeholders are optimistic about overcoming previous challenges and achieving long-term success. The strategic focus on infrastructure development, combined with improved regulatory mechanisms, is expected to drive progress and create a robust, efficient transportation network across the country.
