Construction, award of highway projects at 7-year low in 2025-26

NEW DELHI: Highway construction and awards for new works fell to a seven-year low in 2025-26, official data show. While overall construction stood at less than 10,000 km, a first since 2019-20, barely 7,000 km of works were awarded in FY26.

The reasons for the fall in performance on these two key parameters in the highway sector include road agencies’ following stricter pre-condition of land availability and clearances before bidding out projects and a sharp decline in conversion of state highways to National Highways (NHs).

Officials said that agencies have maintained “self-restraint” to ensure that projects once bid out don’t get stuck or delayed due to non-availability of land and other issues, such as forest and environment clearance and utility shifting.

“Projects getting delayed serve no purpose; rather this results in cost escalation. A lot of efforts have been put into bringing down the number of delayed projects. Second, the focus now is on building more economic corridors and expressways rather than incremental expansion of existing highways,” an official said.

National Highways Authority of India (NHAI), which is responsible for construction and maintenance of wider highways, said last week the agency had constructed 5,313 km of NHs, which was about 15% higher than the target of 4,640 km for the year.

Industry insiders said that as the number of NH development projects offered by NHAI and other agencies have fallen substantially, contractors are scrambling to get work, quoting rates up to 42% less than bid prices. “The impact of fewer projects being bid out will be visible in the next couple of years,” said a senior executive of a major highway developer.