NHAI revenue loss estimated at Rs 1,822 cr on account of toll suspension: Icra

National Highways Authority of India (NHAI) is likely to incur revenue losses of Rs 1,822 crore due to suspension of toll collection on national highways during the 40-day lockdown, rating agency Icra said on Wednesday.

The revenue loss for NHAI operated toll plazas is estimated at Rs 821 crore, while the compensation to BOT Concessionaires under force majeure (political) event is estimated at Rs 1,001 crore, Icra said in a statement.

The Ministry of Road Transportation and Highways (MORTH) has suspended tolling on all national highways, following the 21-day lockdown as per Ministry of Home Affairs (MHA) guidelines, which has now been extended by another 19 days till May 3.

As per the MORTH circular dated March 25, 2020, the toll suspension would be treated as force majeure event and thereby results in a loss to NHAI.

"The total estimated loss to NHAI due to lockdown is likely to be Rs 1,822 crore. With goods traffic (both inter and intra state) allowed to ply from April 20, 2020 onwards, in case if the toll suspension is revoked with effect from April 20, the loss could reduce to Rs 1,181 crore," the statement said.

Rajeshwar Burla, Vice President, Corporate Ratings, Icra said, "There are around 570 operational toll plazas on the national highways across the country which includes both public funded (under NHAI) and projects under build-operate-transfer (BOT) (Toll) and toll-operate-transfer (TOT) mode. For the BOT Toll and TOT projects, under force majeure (political) event, the revenue loss is compensated in the form of extension in concession period".

In addition, 100 per cent of operations and maintenance (O&M) and interest costs are reimbursed for the BOT Toll projects for the affected period, he said, adding this would amount to 50-55 per cent of loss of revenue incurred by these projects.

Whereas for projects which are public funded (currently being tolled by NHAI through toll contractors), the suspension would result in a direct revenue loss for NHAI.

The statement said the suspension may be revoked from April 20, 2020 as the goods traffic is allowed to ply as per new MHA guidelines in which case, if toll suspension is revoked from April 20, the loss could reduce to Rs 1,181 crore.

Icra said the total amount of toll collected through the 570 toll plazas in FY2019 stood at Rs 24,396 crore, averaging Rs 66.84 crore per day which was assumed to increase at 3 per cent thereafter.

Drawing parallels with de-monetisation in November 2016, Icra note said that after the 24-day period toll suspension post de-monetisation, NHAI offered compensation to the toll road SPVs under force majeure political clauses and incurred loss in the range of Rs 650-700 crore.

Road Transport and Highways Minister Nitin Gadkari yesterday said that the NHAI may be directed to compensate the losses incurred.

"In view of COVID-19, it has been ordered to temporarily suspend the collection of toll at all toll plazas across India," Gadkari had announced last month.

This will not only reduce inconvenience to emergency services but also save critical time, the minister has said.

NHAI had rolled out the electronic toll collection programme across India in December on its over 500 toll plazas while doubling toll charges from the vehicles entering FASTag lanes without the tag.

In order to give prime importance to existing FASTag users, dissuade defaulters and further encourage adoption of FASTags by national highway commuters, vehicles without FASTags entering the FASTag lane were being charged double the toll fee, and last month over Rs 20 crore were collected from 20 lakh vehicles encroaching FASTag lanes across India.

About two crore FASTags have been issued through multiple Point of Sale (PoS) locations. FASTag transaction by NHAI last month had crossed four million per day.

In order to further increase digital collection of user fee via FASTag at national highways fee plazas, NHAI had also waived off the FASTag cost of Rs 100 for NHAI FASTag.