CARE Ratings expect highway construction to pick up to 30-32 km per day

Highway construction will increase up to 30-32 km per day in the current fiscal, as the execution of projects is likely to pick up in the remaining months, CARE Ratings said Thursday.

However, it said the overall pace of construction is expected to decline in 2019-20 on account of funding shortage for new projects.

"Despite the slowdown in construction rate to 23 km/day for the first seven months of the year due to monsoon and seasonal disruption, we expect execution to pick up over the next four months, which would push overall road construction rate to an all-time high in 2018-19," CARE Ratings said in a statement.

The current fiscal ends on March 31, 2019.

Although NHAI would be able to collect toll on hybrid-annuity model (HAM) projects achieving completion by 2018-19, there would be cash flow mismatch for the company during the ramp-up of these projects, the rating agency said.

It said factors like delay in obtaining pre-requisite land for new projects under engineering, procurement and construction and HAM, and achieving financial closure due to the risk aversion of public sector banks would continue to negatively impact the overall development in the sector.

(With inputs from agencies.)