State highways put IRB in slow lane

Traffic stable on national highways managed by company

IRB Infrastructure's traffic growth for the quarter has been slower mainly because traffic at its state highway road projects shrank for the second quarter ended September, as compared to last year.

Traffic at three of the company's state highway projects shrank two to three per cent. The company's managing director, Virendra Mhaiskar, said there were various reasons for the shrinking traffic.

"There have been interior issues with smaller projects like monsoons and parallel roads. Some of the adjoining corridors have not been in shape, so traffic has been affected," he said.

Each corridor has its own reason for slowdown. The mining ban in Karnataka affected traffic from cargo movement in the Chitradurg area in the state. The Pune-Nashik area was impacted due to slowdown in the automobiles industry.

"The auto spare parts industry in the region (Pune) slowed down. Some of them are holding on to huge inventories. Those issues have impacted the localised zones," said Mhaiskar.

In comparison, the national highways that the company operates have been performing at a much better rate.

"Our Mumbai-Pune highway grew at around 5.5 to six per cent, and the traffic has been stable," he said.

Vikash Sharda, senior manager at PriceWaterhouseCoopers said state highways were the ones to get affected first by slowdown.

"National highways account for 40 per cent of the total traffic, and are a major contributor. State highways act as feeder roads to national highways, as traffic flows from state highways to them. So, the impact of slowdown would be higher on state highways than national highways," he explained.

The highways of the state that state governments seek to allot on a public-private partnership model are the sectors that have a track record of traffic flow. However, if these highways are in trouble, the other roadways would have a much worse track record with traffic, industry analysts say.

The traffic has not been growing as expected on highway projects. Most of the projects currently under operation were bid for and won in 2007-08. In those times, it was expected the country's gross domestic growth would grow over eight per cent a year. However, now the projections have reduced to 5.5 per cent. The traffic on the roads has a direct correlation to economic growth.

"Everyone had expected growth to come down, but no one expected decline in traffic," said Sharda.