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Bumpy road ahead: High debt and a drought of orders put the brakes on the infra sector

For the last five years, road contracts from NHAI have been the bread and butter of infrastructure companies. But with the government pushing for more private participation and new orders drying up, it seems the chickens have come home to roost.
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priyanka
23 Sep 2019 6 Mins Read 0 comment
The 7.2km Pardi flyover in Nagpur being built by the National Highways Authority of India missed its deadline in March 2019. BCCL
The 7.2km Pardi flyover in Nagpur being built by the National Highways Authority of India missed its deadline in March 2019.
In his Independence Day speech, Prime Minister Narendra Modi reaffirmed the government’s commitment to spending around INR100 lakh crore on infrastructure over the next five years. While the target was said to be too ambitious, most in the industry cheered in support of the announcement, stating that even if half (of the target) was met, it would be a massive
traffic growth in 34 toll-road projects, the traffic growth has come down to 4.2% in per-car unit as compared to 7%-8% last year. A year down the line, without fresh orders, revenue visibility and debt servicing may become a real problem for infrastructure companies, unless the right reforms come in the right time. ( Graphics by Abdul Shafiq)
In his Independence Day speech, Prime Minister Narendra Modi reaffirmed the government’s commitment to spending around INR100 lakh crore on infrastructure over the next five years. While the target was said to be too ambitious, most in the industry cheered in support of the announcement, stating that even if half (of the target) was met, it would be a massive traffic growth in 34 toll-road projects, the traffic growth has come down to 4.2% in per-car unit as compared to 7%-8% last year. A year down the line, without fresh orders, revenue visibility and debt servicing may become a real problem for infrastructure companies, unless the right reforms come in the right time. ( Graphics by Abdul Shafiq)

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