Toll collection on national highways likely to fall by 25-30% in May

Toll collection on national highways likely to fall by 25-30% in May

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Although the degrowth in toll collections has been across vehicle categories, the impact has been severe on the passenger vehicles and bus categories due to strict restrictions imposed on people movement by various states.

Toll collection on national highways is likely to fall by 25-30% month-on-month in May as a fall out of the lockdown and restrictions imposed by several states to contain the spread of the coronavirus, rating agency Icra said on Thursday. In April also, toll collection also fell by 10% over March, 2021.

However, Icra’s vice president Rajeshwar Burla said, “With fall in number of Covid cases from third week of May 2021, states are expected to relax the lockdown restrictions in a gradual manner. We expect the toll collections to ramp-up from June onward.”

Toll collection in the national highways stood at Rs 26,851 crore in 2019-20 as against Rs 24,396 crore a year earlier.

Icra arrived at the projection based on a study on toll collections data for 29 projects spread across 11 states over March 1 to May 10, 2021. As per the study, Maharashtra is the worst-hit state, with the lockdown restrictions having started earlier than other states due to which de-growth has been higher in April 2021.

Although the degrowth in toll collections has been across vehicle categories, the impact has been severe on the passenger vehicles and bus categories due to strict restrictions imposed on people movement by various states.

Unlike the earlier wave where there was a nationwide lockdown and toll suspension; this time the nature of lockdowns is more regional with relaxations to both manufacturing and construction activities and movement of goods. As a result, the impact on the overall toll collections is expected to be less severe when compared to last year.

“Despite hitting a speed breaker in the form of second wave of Covid; toll road projects are expected to witness low teen revenue growth in FY2022 on the back of low base and inflation linked increase in toll rates,” Burla said.

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