NHAI may miss FY26 project award target amid approval delays
As the deadline for fiscal year 2026 approaches, the National Highways Authority of India (NHAI) finds itself grappling with obstacles in achieving its project award targets. The slow pace of project appraisal and approvals has been exacerbated by...
The National Highways Authority of India (NHAI) could miss its FY26 project award target due to delays in project appraisal and approval, as well as the private sector's hesitation to take up large contracts under the public-private partnership model.
In the current fiscal year ending March 31, National Highways Authority of India has so far invited bids for only 75 projects, which is about 60% of the 124 projects identified for full year, according to government data seen by ET.
Data also suggests that in terms of physical length of roads, smaller projects are being bid out first because of faster clearances, while signalling a cautious approach by the private sector. The lag is more pronounced in value terms, suggesting that smaller projects are being prioritised.
In the first 10 months of the year, NHAI invited bids for 3,195 km of road length, roughly half of the 6,376 km targeted for the year. The capital cost involved in projects so far is ₹1,48,098 crore, which is 42.8% of the targeted cost (₹3,45,466 crore). Delays in appraisals and approvals, particularly for large PPP projects, have slowed awards, according to people familiar with the matter. "This is primarily because appraisal and approvals for big-ticket projects take much longer, especially when it is a PPP project, as due diligence is needed before awarding the project," a senior official told ET.
NHAI, however, is optimistic.
"A significant pipeline of projects, including projects to be awarded on HAM (hybrid annuity model) mode are at advanced stages of preparation," a senior NHAI official said. "With focused efforts on front-loading approvals, NHAI aims to ensure timely execution of NH projects post award, which is expected to positively impact the risk perception among private investors."
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Kuljit Singh, partner and national infrastructure leader at EY India, said there is a need to speed up preparatory steps to fast-track bidding of road projects. "There are several preparatory steps required by NHAI before projects can be bid out such as land acquisition, DPRs, etc.," said Singh.
"If some of these steps can be either accelerated pre-bid (or partially deferred to post bid), then the pace of bids and awards can pick up."
