In a setback to the ambitious Bharatmala programme, the approval and bidding process for national highways witnessed a significant shortfall of 34 percent in the fiscal year 2023-24 (FY24), primarily due to pending approval from the Cabinet regarding the revised cost of the scheme.
The Ministry of Road Transport and Highways (MoRTH) reported that highway construction awards in FY24 amounted to 8,581 kilometres, falling short of the target of 13,290 kilometres. The ministry attributed this shortfall directly to the delay in obtaining revised Cabinet approval for Bharatmala. Despite the challenges, highway construction in FY24 reached 12,349 kilometres, averaging 34 kilometres per day. However, this figure pales in comparison to the peak construction of 13,327 kilometres achieved in FY21, which included substantial strengthening efforts covering 4,900 kilometres. Credit rating agency ICRA, in its December 2023 forecast, highlighted the impact of the model code of conduct for general elections on awarding activity, further exacerbating the slowdown in highway contracts. Notably, around 40-45 percent of construction approvals typically occur in March alone.
The escalating cost of the Bharatmala project has been a cause for concern, prompting the Union Finance Ministry to advise MoRTH against awarding new projects under the scheme until Cabinet approval is secured for the revised cost. Since its approval in 2017, Bharatmala Phase-I has seen 76 percent (26,418 kilometres) of the targeted 34,800 kilometres awarded for construction, with approximately 15,549 kilometres completed by December 2023. The estimated cost of the Bharatmala project has doubled since its inception, soaring from Rs 5.3 lakh crore to Rs 10.6 lakh crore. This surge is attributed to increased land acquisition costs and adjustments in project composition and configuration, particularly concerning economic corridors and expressways. As stakeholders navigate the challenges posed by bureaucratic hurdles and cost escalations, expediting Cabinet approval for the revised Bharatmala cost becomes imperative to ensure the timely and efficient execution of critical infrastructure projects aimed at bolstering India’s national highway network and fostering economic growth.
