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MoRTH Highway Awards Expected to Rebound in FY27
The roads ministry gives out contracts to build highways.
ICRA thinks it may award more projects in FY27 than it did in FY26.
The ministry awarded about 7,000 kilometers of roads in FY26, down from 7,538 kilometers the year before.
ICRA expects awards to reach 8,000–8,500 kilometers in FY27.
The ministry wants to build 10,000 kilometers, but ICRA expects actual construction to be lower.
Expensive and harder-to-find bitumen has slowed some work.
Most projects will probably continue using the EPC method.
The ministry is also trying to attract more private companies through toll-based projects.
Toll collections are expected to grow faster in FY28 after slower growth in FY27.
ICRA expects MoRTH highway awards to rise to 8,000–8,500 km in FY27 from about 7,000 km in FY26.
Awards fell from 7,538 km in FY25 amid efforts to resolve land acquisition and environmental clearance issues.
MoRTH road execution is projected at 9,000–9,500 km in FY27, below its 10,000-km construction target.
EPC projects are expected to remain dominant, while HAM may account for 24–26% of FY27 awards.
Higher bitumen prices and supply disruptions affected execution, while toll revenues are forecast to accelerate in FY28.
- Who
- The Ministry of Road Transport and Highways (MoRTH), with projections from ICRA and comments from Suprio Banerjee.
- What
- Highway project awards and construction activity are expected to improve or remain broadly stable in FY27, while project-awarding methods may shift gradually toward toll-based private participation.
- Where
- The roads sector overseen by MoRTH; the articles do not specify a particular project location.
- When
- The outlook covers financial year 2026–27, with toll-revenue projections extending to FY28.
- Why
- Higher budgetary allocation may support more awards, while earlier land and clearance issues, slower awards, and bitumen disruptions affect execution.
ICRA forecast
MoRTH target and policy direction
Highway construction volume
ICRA forecast
ICRA expects execution to remain range bound at 9,000–9,500 km in FY27 because awards slowed over the past three years.
MoRTH target and policy direction
MoRTH has set a higher target of 10,000 km of highway construction for FY27.
Project-awarding model
ICRA forecast
ICRA expects EPC to remain the preferred route, with HAM accounting for an estimated 24–26% of FY27 awards.
MoRTH target and policy direction
MoRTH is gradually shifting focus toward BOT (Toll) projects and has revived them through a revised model concession agreement to encourage private participation.
Impact of BOT revival
ICRA forecast
ICRA’s Suprio Banerjee said the revised agreement is welcome but that its effect on construction activity remains uncertain.
MoRTH target and policy direction
The ministry’s policy move is intended to increase the role of private-sector participation in roads.
Key facts
- FY26 road awards
- Around 7,000 km, down from 7,538 km in FY25.
- FY27 award forecast
- ICRA expects 8,000–8,500 km of highway awards.
- FY27 execution forecast
- ICRA projects 9,000–9,500 km of road execution.
- MoRTH construction target
- 10,000 km of highways in FY27.
- Awarding methods
- EPC accounted for 65–70% of recent awards; HAM accounted for 25–30%.
- FY27 HAM estimate
- ICRA estimates HAM projects will represent 24–26% of awards.
- Toll-revenue outlook
- Growth is projected at 7–9% in FY27 and 10–12% in FY28.
Quotes
Suprio Banerjee
Co-Group Head, Corporate Ratings, ICRA
“The Ministry’s move to revive the BOT (Toll) road projects through the revised model concession agreement is a welcome step and is expected to support increased private sector participation in the roads sector. However, the extent to which it translates into a meaningful revival in construction activity remains to be seen.”
financialexpress.com
Sources
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