Workers labor at a road construction site in India (Photographer: Prashanth Vishwanathan/Bloomberg)

Breakneck Pace of India Road Awards May Set $15 Billion Record

(Bloomberg) -- India has awarded road contracts at a “breakneck pace” in 2018, raising the prospect that orders will reach a record this financial year, according to IIFL Wealth Management Ltd., the nation’s largest money manager for the rich by assets.

Orders from the National Highway Authority of India may cross 1 trillion rupees ($15.3 billion) in the 12 months through March, climbing from 600 billion rupees a year ago, Alok Deora, a Mumbai-based infrastructure research analyst at IIFL Wealth Management estimated in a phone interview.

“Going by the tender pipeline, the breakneck pace of NHAI order flows is likely to continue in the next financial year,” he said.

Breakneck Pace of India Road Awards May Set $15 Billion Record

NHAI is at the center of Prime Minister Narendra Modi’s ambitious Bharatmala plan to spend $106 billion on 83,677 kilometers of road construction by 2022 to boost economic growth and employment. Contract awards were in the slow lane till December, meeting just over a tenth of a the full-year target of 10,000 kilometers, due to delays in land acquisition and the roll-out of a nationwide sales tax.

Dilip Buildcon has bagged the largest number of projects tendered this quarter, worth about 107 billion rupees, Deora said. Other big beneficiaries include Sadbhav Engineering Ltd., Ashoka Buildcon Ltd. and MEP Infrastructure Developers Ltd., he said.

NHAI is likely to award more than 7,000 km of road contracts, about 60 percent more than last year, Deora said.

Modi’s record on meeting his government’s infrastructure targets and on job creation will prove crucial going into federal election in 2019, giving the administration a platform to highlight its economic credentials.

©2018 Bloomberg L.P.