The NHAI’s Plan for an Extended Road Network Could Set the $15 Billion Mark

By | 11th April 2018

The National Highways Authority of India (NHAI) has awarded road contracts at a fast pace in 2018, as the orders set a new record for the financial year 2017-18. The orders may also cross Rs 1 trillion in the next 12 months according to IIFL management Ltd., India’s largest money manager for the rich by assets. IIFL believes that the breakneck pace of these order flows will continue in this financial year (18-19).

The National Highways Authority of India is currently focusing on Prime Minister Narendra Modi’s ambitious Bharatmala plan. The expected spending on this project is $ 106 billion with road construction set to spread across 83,677 km by 2022 to lift the economic growth and employment percentage. The project will involve construction of highways in many states with the aim of connecting far-flung border and rural areas.

The procedure of awarding contracts gathered pace post December 2017, due to delays in land acquisition and the roll-out of a nationwide sales tax. Dilip Buildcon (DBL), one of the largest road companies in India, has been granted the largest number of projects tendered this quarter, with the overall worth touching the mark of Rs 107 billion. As per the official statement of DBL on Thursday, March 29, the company won a road contract worth Rs 10.04 billion from the NHAI in Madhya Pradesh. They have been assigned for the construction of a tunnel, via duct and Churhat Bypass of Rewa Sidhi Section of NH 75E in Madhya Pradesh on build, operate and transfer mode. The pre-decided construction period of the project is 18 months. They have also been awarded three hybrid annuity projects valued at Rs 32.73 billion in the state of Maharashtra.

Other big players who bagged many projects include Ashoka Buildcon Ltd. and Sadbhav Engineering Ltd. As the record numbers of projects were awarded to DBL, its value on the Bombay Stock Exchange (BSE) rose by 12% to Rs 1,122. This is the company’s new high on the BSE.

DBL’s unique business model combined with its operational frequency makes it one of the prime beneficiaries of Bharatmala Pariyojana project as well. With its powering presence in 13 different states, DBL is placed much better than other companies to benefit from the upcoming contract awarding procedures. The first few months of this financial year should give more clarity on the future endeavours of the NHAI, and the contract awarded organisations.