Little relief for tolling firms as collection may drop 60% post lockdown

Even though the non-political force majeure will be invoked it will not cover the decline in traffic volumes, say experts

Resumption of toll at the national highways on April 20 may bring some respite to tolling companies, which are reeling under financial stress due to suspension of the levy. However, experts say that overall toll collection at the plazas will decline by 60 per cent.

Since coronavirus is a pandemic, it falls under the category of non-political force majeure where the compensation is much lower or negligible. 

"The traffic will be lower than normal and will be borne by tolling companies. Even though the non-political force majeure will be invoked it will not cover the decline in traffic volumes," said Jagannarayan Padmanabhan, Director and Practice leader–Transport and Logistics, Crisil Infrastructure Advisory.

There is expected to be 60 per cent drop in toll revenues till May 3, he said.

In the case of a political force majeure, such as demonetisation, the compensation amount payable to toll companies is higher. 

However, it is learnt that the companies are yet to be compensated for the toll revenue lost during demonetisation, when the tolling operations were suspended. 

The Union government on Friday said that the National Highways Authority of India (NHAI) will resume toll collection on national highways from April 20.

The government had on March 25 temporarily suspended toll collection on national highways to ease emergency services in view of the coronavirus outbreak.

"In view of the relaxations provided by the Ministry of Home Affairs for inter-state and intra-state movement of all trucks and other goods / carrier vehicles ...NHAI should take actions necessary for compliance of the orders of Ministry of Home Affairs ... and tolling operations be resumed w.e.f. 20th of April 2020," the Ministry of Road Transport and Highways said in a letter to NHAI.

The truckers have also demanded that with the resumption of most services on the highways from April 20, the ancillary sector to support transport movement on highways should also be opened. 

With freight movement by road likely to pick up exponentially from April 20, the tyre association has said all support systems to truck operators, such as repair shops and tyre showrooms, will be put in place across the country, said S P Singh coordinator, Indian Foundation of Transport Research & Training (IFTRT).