COVID-19 lockdown: How national highways construction will take a hit

Even before the onset of the Covid-19 crisis, fiscal 2019-20 had been an odd year for highway construction in India, with the pace of work slowing down for the first time since the Narendra Modi government assumed power in 2014, largely due to the general elections in May and a liquidity crunch.

The outbreak of the pandemic has only made matters worse. Besides the stoppage of work that lockdowns to contain the disease have caused, there are apprehensions of labour unavailability hitting work in the aftermath of the crisis. To put it into perspective, nearly 4,076 man-days are required for the construction of one km of highways.

“Labour availability is going to remain a challenge until the Covid-19 issue subsides. This will impact construction work,” says ICRA’s vice president Rajeshwar Burla. Apart from uncertainty over the end of the crisis, sector experts fear that migrant workers who have moved to their native places may choose to stay there, returning only if they don’t find suitable jobs back home.

In fact, highway concessionaires started facing a labour issue before the Centre announced a 21-day lockdown beginning March 25. The imposition of a lockdown across 75 districts prior to the national lockdown resulted in concessionaires having to stop work on many stretches. Any extension of the lockdown would thus delay work being resumed and the government’s ambitious agenda for highway construction getting back on track.

Delay in project completion owing to the lockdown and its aftermath is also likely to impact the turnover of contractors and, as a result, their profitability.

financial express
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