Shift to Private Sector in Infrastructure Capex from FY25: Report

A report by Antique Stock Broking highlights the shift from government to private sector in capital expenditure, starting FY25. This change is expected to be significant in the road sector, while opportunities in railways, solar, and water management also expand.

A recent report by Antique Stock Broking indicates an impending shift in capital expenditure (capex) from public to private sector, commencing in fiscal year 25. The rise in private investments suggests a moderation in government spending, which has been the primary driver of infrastructure development in recent years, particularly in road projects.

The report underscores that government-led capex in the road sector, mainly through Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) projects, will likely see a decrease. Conversely, private sector investments, particularly via Build-Operate-Transfer (BOT) models, are expected to surge. This adjustment may signal a broader shift in infrastructure funding approaches in the future.

According to the report, the total length of road projects awarded is projected to increase from 8,581 kilometres in FY24 to 10,000 kilometres in FY25, and further to 12,000 kilometres by FY26. The anticipated increase follows a stall in project awards due to the election code of conduct. The report also highlights the government's Bharatmala scheme, which aims to award projects worth Rs 2.4 lakh crore, alongside expanding opportunities in railways, solar energy, and water management sectors.

(With inputs from agencies.)