MUMBAI: As much as 55% of the 374 road projects awarded by the national highways body, with an aggregate construction cost value of 1 trillion, are delayed beyond six months as of December 2024. According to a Care Ratings report, the time overrun has increased from 33 % in June 2023 to 55% in December 2024.
All these projects are under the hybrid annuity models or HAM, which is the most preferred model in road building constituting as much as 55% of all national highways development. The report is based on the 374 national highway contracts underway now, the agency said, adding these projects were awarded between 2015 and 2024 and these projects span an aggregate length of 16,000 km and have a total bid project cost (BPC) exceeding Rs 4.03 trillion.
As of September 2024, 42% of the sample BPC, aggregating over Rs 1.65 trillion, have been commissioned, while around 45%, aggregating over Rs 1.80 trillion, are in the construction phase, and the balance of 13% are awaiting appointed date to commence construction.
Among the under-construction projects, 55%, with an aggregate BPC of Rs 1 trillion are delayed beyond six months. While grant of extension of time mitigates the project specific risk to an extent, impacts overall construction pace and profitability of roads developers.
According to the agency the main factors contributing to the heightened competitive intensity, non-availability of hindrance-free right of way and excessive rainfalls.