Pace of road building is cause of worry for Construction Equipment makers

Even as the pace of economic recovery is gathering momentum, the speed of road construction at 20 kilometers per day is adding to the worry of the Indian construction equipment industry.   

The pace of road construction is dismally low and almost half of the expectation of 40 kilometers a day. Industry sources say this is on account of extended monsoon, challenges on land acquisition and environmental clearances, project costing and financial issues.

As per data collated by research firm Nuvama, the road construction during H1FY23 (NHAI + MoRTH) stands at 3,559km (19.4km/day) against 3,824km in H1FY22 (20.9km/day); of this, the NHAI has constructed 1,370km of roads during H1FY23. 

National Highways Authority of India (NHAI) and Ministry of Road Transport & Highways (MoRTH) are responsible for major highway constructions in the country.  

Dimitrov Krishnan, MD, Volvo CE (India) and President, ICEMA- a lobby body representing over 95 percent of OEMs from the country told Autocar Professional 

“The industry witnessed some activities during the January-March period, but the momentum did not sustain. Subsequently, the pace of the game dropped off. So, during the current fiscal year, the average rate is only 20 kilometers per day, which is far below the expectation that most of us have at about 40 kilometers per day of construction". 

Dimitrov said that the construction equipment industry has taken up the issue with the government and, " we are being assured that it will pick up" he continued. 

Crucially, NHAI witnessed a drastic fall in its road awarding activities with just 16 kilometers getting awarded in September. For the sake of perspective, NHAI had awarded road construction work measuring 188 km across six projects in August 2022 and 866 km across 28 projects in September 2021.