September 16, 2025

The highway construction scene hit the pause button in the first half of FY26, but the second half looks sizzling hot! Rajashree Murkute, Senior Director & Head of Infrastructure Ratings at CareEdge Ratings, told ET Now that tendering tends to slow down early in the year because of the Union Budget and approval delays. This year, it got even slower due to new bidding rules by the Ministry of Road Transport and Highways (MoRTH). These rules are tough, pushing out smaller players so only serious and strong bidders get a chance. Murkute said, "We expect tendering to gather pace in the second half, following the typical 30:70 split between H1 and H2. With more than 125 projects already identified, awarding activity should be strong in the coming months." She also talked about the new Additional Performance Security (APS) rule, explaining it will stop non-serious bidders from joining but won’t hurt well-funded players at all. But it’s not all smooth roads – construction is facing some speed bumps. Approval delays, land problems, and a thin project pipeline from earlier years could slow construction growth by 7–10% compared to last year. Despite this, toll road traffic is expected to zoom ahead with 7–9% growth in FY26 due to booming logistics, increased coal mining, and energetic freight movement. The new annual FASTag pass also threw some twists. While roads packed with passenger vehicles might feel a short-term hit, Murkute assured, "toll operators will be compensated under change-in-law provisions." More excitingly, she highlighted that FASTag has brought in more transparency and attracted global investors through InvITs and other investments. "FASTag has actually emerged as an enabler rather than a dampener. It has boosted transparency and investor confidence in the sector," she added. So, while highway tendering took a short nap in H1 FY26, the road ahead in H2 looks bright and bustling with projects ready to break ground and investors eager to join the ride!

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Tags: Highway tendering, Infrastructure projects, Careedge ratings, Morth, Fastag, Construction growth,