With limited ordering in road projects projected for the next few years, the cost of land acquisition, too, is expected to remain stable in a range of Rs 3-3.5 crore per hectare till 2020.
Analysts at Kotak Institutional Equities said while the pace of ordering has an influence on the pace of land acquisition, the National Highways Authority of India (NHAI), however, is facing limitations in ensuring it accelerates the pace of its annual ordering beyond 7,000 km.
The bottlenecks are with respect to availability of consultants to prepare detailed project reports (DPRs), the lack of companies to execute orders, and last but not least, the constraints faced by lenders to fund road projects.
As a result, after a sharp 34% year-on-year jump in land acquisition costs to Rs 23.8 crore per hectare in 2018, driven by record ordering, the next two years are expected to be more sedate. Read More