Close
My Account
Log Out
User Name
Password
Forgot Password?
-Landing Page- Home
Why I am not able to Login? You have subscription for unlimited usage for the services. For this, you need to login from Login Manager. You will find an icon (similar to Infraline logo) on your desktop. If you don't have Login Manager, kindly find instructions on 'Subscription > Paid Subscription link' on FAQ page (Click Here).
Published:January 8, 2020 5:17 PM
India has one of the fastest growing road networks in the world, in recent time the national highway length in the country grown rapidly to cater large traffic. Further in this way recently government launched vision 2025 which will invite around INR 19.6 lack crore in next five year opens opportunity doors for private players. What else we can expect from 2020 good investment, better road and best infrastructure. At the current rate of a 17% annual increase in projects awarded, around 71,000 km can be awarded by FY21. For current fiscal per day construction target has been fixed to 45 km per day, average construction in FY19 was 27 km per day. Launch Bharatmala 2.0 projects with a view to support the states to develop state road networks connecting the interior regions to the main roads to effectively leverage the economic potential and market opportunities of the concerned regions. Revenue generating assets expected to reach 46,000 km by FY25 Investment Scenario Over the last few years, India witnessed a substantial rise in foreign investment. Apart from center, states such as Maharashtra, Gujarat, Haryana and many others have contributed heavily to the sector with an investment of Rs 2.6 trillion over FY15-19. The sector has been a prime focus in getting FDI. Total original cost of implementation of 858 projects when sanctioned, was of the order of Rs. 511209.96 crore but this was subsequently anticipated to Rs. 532241.51 crore implying a cost overrun of 4.1%. The expenditure incurred on these projects till October, 2019 is Rs. 285286.83 crore, which is 53.6% of the anticipated cost of the projects. National Highway Authority of India (NHAI) is expected to award 32,300 km length of highway and roads by FY24. Targets for 2019-20 was 10,000 kms for award and 11,000 kms for construction and we have achieved 3211 for award and 5958 for construction till Nov 2019 Attractive Opportunity As per current scenario, healthy fundamentals, attractive valuations along with strong earnings growth makes this sector an attractive investment center. Bharatmala itself is a Rs 6.3 trillion plus opportunity in the road sector. Policy Support As per various industry reports, India is expected to be the third largest construction market globally by 2022. India has a huge requirement of Rs 100 trillion (US$ 1,400bn) towards development of infrastructure by 2024. As seen from early years, we believe governments push on investment in road sector would continue. For FY20, the union budget has sanctioned around Rs 780 billion towards the capital outlay. We expect similar trend to continue with projects which are to be awarded. Distribution of projects across various corridors under Bharatmala Phase-I Expected revenue opportunity till FY25 Source: NHAI, PL *Note: Value calculated at Rs150mn/km Update on North East States Construction of National Highways & other roads under Special Accelerated Road Development Program-North East (SARDP-NE) has been increased from 466 kms in 2014-15 to 1029 kms in 2018-19. 164 projects covering 4017 km at an estimated cost of Rs. 44805 crore are in progress in North Eastern States. The major challenge Government is facing to improve National Highways are Land acquisition Shifting of utilities Environment & Forest Clearance Wild life clearance Availability of less working season in Hilly region Non-availability of skill man power and local Agencies in hilly region Budgeted expenditure for Bharatmala Phase-I: Rs 6.3trn over 5 years Particulars (Rs bn) FY19 FY20E FY21E FY22E FY23E Total Project Expenditure Land Acquisition 391 158 0 0 0 549 Project Expenditure Work 444 456 620 741 891 3,153 Annuity / Grants 90 106 117 141 203 656 Total Project Expenditure 926 719 737 882 1,094 4,358 O&M 26 34 47 64 86 257 Debt Servicing 146 192 220 470 617 1,645 Others 17 5 6 7 7 43 Total 1,115 951 1,010 1,423 1,804 6,303 Sources: NHAI,PL In all, the road ministry plans to complete 416 projects worth Rs 3.26 lakh crore by 2020 and we are going to witness investment of INR 19.6 lakh crore in roads infrastructure in next five years. Major concern after all is road safety as India contributes high number of road fatality in the world. We hope ministry will understand and boost the use of technology like, LIDAR, ITS, Smart Signs etc. for road safety and transportation in the country like other European countries.
India has one of the fastest growing road networks in the world, in recent time the national highway length in the country grown rapidly to cater large traffic. Further in this way recently government launched vision 2025 which will invite around INR 19.6 lack crore in next five year opens opportunity doors for private players. What else we can expect from 2020 good investment, better road and best infrastructure.
At the current rate of a 17% annual increase in projects awarded, around 71,000 km can be awarded by FY21. For current fiscal per day construction target has been fixed to 45 km per day, average construction in FY19 was 27 km per day. Launch Bharatmala 2.0 projects with a view to support the states to develop state road networks connecting the interior regions to the main roads to effectively leverage the economic potential and market opportunities of the concerned regions. Revenue generating assets expected to reach 46,000 km by FY25
Investment Scenario
Over the last few years, India witnessed a substantial rise in foreign investment. Apart from center, states such as Maharashtra, Gujarat, Haryana and many others have contributed heavily to the sector with an investment of Rs 2.6 trillion over FY15-19. The sector has been a prime focus in getting FDI.
Total original cost of implementation of 858 projects when sanctioned, was of the order of Rs. 511209.96 crore but this was subsequently anticipated to Rs. 532241.51 crore implying a cost
overrun of 4.1%. The expenditure incurred on these projects till October, 2019 is Rs. 285286.83 crore, which is 53.6% of the anticipated cost of the projects.
National Highway Authority of India (NHAI) is expected to award 32,300 km length of highway and roads by FY24. Targets for 2019-20 was 10,000 kms for award and 11,000 kms for construction and we have achieved 3211 for award and 5958 for construction till Nov 2019
Attractive Opportunity
As per current scenario, healthy fundamentals, attractive valuations along with strong earnings growth makes this sector an attractive investment center. Bharatmala itself is a Rs 6.3 trillion plus opportunity in the road sector.
Policy Support
As per various industry reports, India is expected to be the third largest construction market globally by 2022. India has a huge requirement of Rs 100 trillion (US$ 1,400bn) towards development of infrastructure by 2024.
As seen from early years, we believe governments push on investment in road sector would continue. For FY20, the union budget has sanctioned around Rs 780 billion towards the capital outlay. We expect similar trend to continue with projects which are to be awarded.
Distribution of projects across various corridors under Bharatmala Phase-I
Expected revenue opportunity till FY25
Source: NHAI, PL
*Note: Value calculated at Rs150mn/km
Update on North East States
Construction of National Highways & other roads under Special Accelerated Road Development Program-North East (SARDP-NE) has been increased from 466 kms in 2014-15 to 1029 kms in 2018-19. 164 projects covering 4017 km at an estimated cost of Rs. 44805 crore are in progress in North Eastern States.
The major challenge Government is facing to improve National Highways are
Land acquisition
Shifting of utilities
Environment & Forest Clearance
Wild life clearance
Availability of less working season in Hilly region
Non-availability of skill man power and local Agencies in hilly region
Budgeted expenditure for Bharatmala Phase-I: Rs 6.3trn over 5 years
Particulars (Rs bn)
FY19
FY20E
FY21E
FY22E
FY23E
Total
Project Expenditure Land Acquisition
391
158
0
549
Project Expenditure Work
444
456
620
741
891
3,153
Annuity / Grants
90
106
117
141
203
656
Total Project Expenditure
926
719
737
882
1,094
4,358
O&M
26
34
47
64
86
257
Debt Servicing
146
192
220
470
617
1,645
Others
17
5
6
7
43
1,115
951
1,010
1,423
1,804
6,303
Sources: NHAI,PL
In all, the road ministry plans to complete 416 projects worth Rs 3.26 lakh crore by 2020 and we are going to witness investment of INR 19.6 lakh crore in roads infrastructure in next five years. Major concern after all is road safety as India contributes high number of road fatality in the world. We hope ministry will understand and boost the use of technology like, LIDAR, ITS, Smart Signs etc. for road safety and transportation in the country like other European countries.
Related News
add comments
Name*
Email*
Your Comments