Taking a toll: Traffic on highways set to de-grow 16.5%

New Delhi, May 6 (IANS) With the nationwide lockdown to fight the Covid-19 pandemic restricting inter- and intra-state traffic to essential services, toll collections from build-operate-transfer (BOT) highway projects, and remittances from publicly funded projects would decline sharply in the near term, global analytics firm Crisil said.

The National Highways Authority of India (NHAI), the nodal agency for the roads sector, had stopped toll collections up to April 20, after the government imposed the nationwide lockdown on March 25 to contain Covid-19. Toll collection has restarted since, but there is unlikely to be a V-shaped revival in traffic after the lockdown ends – probably – on May 17. There will only be a gradual return to normalcy, the rating agency said in its report on road and highway sector.

It added that due to restrictions, toll collections and remittances from existing roads will fall a sharp 13 per cent assuming there's only a 57 day lockdown (from March 22 to May 17).

That decline will be an even sharper 17 per cent if the lockdown is extended by another two weeks.

While construction of new highways is also affected, those constructed and commissioned over the past one year will help reduce the rate of decline in toll collections by more than half.

Over the long term (fiscals 2019-2024), CRISIL Research expects toll collections to bounce back to a healthier compound annual growth rate (CAGR) of 11-12 per cent on the back of new road construction. This, however, is lower than the 14.6 per cent clocked in the preceding five fiscals. New road executions will hold the key to both reducing the impact of the lockdown in the immediate term and boosting growth over the long term.



Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button