Strong Pipeline: Opportunities for expressway and greenfield corridor development

Opportunities for expressway and greenfield corridor development

The National Highways Authority of India (NHAI) has been exceedingly ambitious with regard to its road development targets. It plans to award at least 4,500 km in the ongoing fiscal year. For projects under the BharatmalaPariyojana (Phase I), the authority expects to complete the award process by 2022-23. The upcoming expressways and greenfield corridors are set to create a plethora of opportunities for contractors and highway developers since most of the projects are yet to be awarded.

Opportunities under greenfield corridors

Under Phase I of the BharatmalaPariyojana, NHAI has planned the development of greenfield access-controlled corridors and expressways spanning a total length of about 6,000 km across the country, entailing a total investment of about Rs 3 trillion. The targets under Phase I include the construction of six greenfield expressways spanning a length of about 2,350 km and entailing an investment of Rs 1.43 trillion. Of these, while about 800 km of expressways have already been awarded, the balance are expected to be awarded by the second quarter of 2021-22. Phase I of the programme also includes the development of 15 access-controlled greenfield corridors spanning a length of about 3,650 km. The corridors will be constructed at an estimated investment of Rs 1.52 trillion. Of these, projects spanning about 950 km have already been awarded and the balance are targeted to be awarded by 2021-22. Besides, NHAI is also in the process of identifying corridors to be built under Phase II of the programme and expects to complete the detailed project reports and land acquisition for the projects by 2023-24.

The Delhi-Mumbai Expressway is among the key projects being implemented by the authority. Recently, NHAI formed a special purpose vehicle, Delhi-Mumbai Development Limited, to fund project construction work. As of August 2020, about 689 km of the total 845 km has been awarded for the Delhi-Vadodara section of the expressway, while 124 km of the 447 km Vadodara-Mumbai section has been awarded. The two sections are being implemented at an estimated investment of Rs 424.8 billion and Rs 400.33 billion respectively.

The 110 km Ahmedabad-Dholera Expressway project is also being implemented by NHAI at a cost of Rs 43.35 billion. Currently, bids for the project are under evaluation. Another key project that is under bidding is the Delhi-Amritsar-Katra Expressway. The 600 km project is being implemented at an investment of Rs 309.36 billion. Meanwhile, bids have been invited recently for a few packages of the upcoming Bengaluru-Chennai Expressway. The project spans a length of 272 km and is expected to entail an investment of Rs 208 billion. Apart from these, bids are expected to be invited soon for the 63 km Kanpur-Lucknow Expressway, which is expected to entail a cost of Rs 41.83 billion.

Of the 15 upcoming greenfield access-controlled highways, the award process has been completed for the Ambala-Kotputli highway, while most of the packages have been awarded for the 762 km Amritsar-Bathinda-Jamnagar Expressway. Meanwhile, the 281 km Bengaluru Ring Road, the 75 km Urban Extension Road II, and the 60 km Delhi-Faridabad-Sohna, 464 km Raipur-Visakhapatnam, 169 km Delhi-Saharanpur-Dehradun, 300 km Surat-Ahmedabad-Solapur, 277 km Chennai-Salem, 92 km Durg-Raipur, 125 km Chittoor-Thatchur, 235 km Kharagpur-Siliguri, 279 km Solapur-Kurnool, 162 km Hyderabad-Visakhapatnam, and 136 km Kota-Indore highways are some of the other key greenfield highway projects that are set to provide opportunities for developers.

The road ahead

Greenfield corridors under the BharatmalaPariyojana will offer immense opportunities for highway developers and contractors. Meanwhile, of the total Rs 20.34 trillion investment in the road sector between 2020 and 2025 proposed under the National Infrastructure Pipeline, about Rs 1.02 trillion has been set aside for the construction of expressways spanning about 2,142 km. Besides, NHAI is planning to incorporate greenfield access-controlled corridors in its portfolio of projects under Phase II of Bharatmala. These corridors will lead to a reduction in logistics costs due to shorter alignments, apart from a reduction in travel time due to higher vehicle speeds, and a reduction in the carbon footprint due to lower fuel consumption. The greenfield corridors will also ensure enhanced safety and better quality of the ride. Going forward, greenfield highway projects with superior technical and design specifications will not only prove to be a key source of opportunity for highway developers, but will also boost the demand for capital goods in the construction sector.