Bharatmala Project's Project Cost Doubles to Rs. 10.64 Lakh Crore: ICRA

ICRA highlighted that pending cabinet approval for the revised cost of Bharatmala Phase-I has impacted project awarding activities, witnessing a year-on-year decline of 48 percent to 2,595 kilometers during the first seven months of FY2024, compared to 5,007 kilometers during the same period in FY2023.

The rating agency anticipates project awarding activity to contract by over 30 percent year-on-year in FY2024.

Providing further insights, Ashish Modani, Vice President and Co-Group Head at ICRA, noted that nearly 95 percent of road awards by the Ministry of Roads and Transport and Highways (MoRTH) in the last five years were granted through the hybrid annuity mode (HAM) and the engineering, procurement, and construction (EPC) route, placing the entire funding burden on the ministry.

Modani highlighted the lower burden on MORTH in the case of Build-Operate-Transfer (BOT) toll projects, leading to a shift in focus toward such projects. ICRA observed that while the average number of bidders for EPC and HAM projects stood at 15 and 8, respectively, for BOT toll projects, it remained below 5.

ET