Indian Economy News

Road construction to clock 16-21% rise in FY24 ahead of general elections: ICRA

According to rating agency ICRA Ltd., road execution activity in FY24 is anticipated to rise 16-21% year-over-year (YoY) to 12,000-12,500 km due to a strong project pipeline, increased government capital spending, and a focus on project completions ahead of general elections.

A 4-5% increase in traffic will certainly help toll collection increase by 6-9% this year, as informed by ICRA.

The Build-Operate-Transfer (BOT)-Toll awards accounted for less than 5% of the orders in the last five years, and its share is expected to remain at similar levels in FY24, the ratings agency said. Despite the anticipated increase in road construction, the engineering, procurement, and construction (EPC) segment will continue to dominate awarding, accounting for 70-75% of awards in FY24.

According to the estimates, toll revenue will increase by 6-9% in FY24, largely due to a 4%–5% increase in traffic.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.