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ICRA maintains stable outlook for road sector amid improved toll collection

Toll collections witnessed a marked improvement on the back of increased movement of both passenger and commercial vehicles

Topics
Road sector | toll collection | ICRA

ANI 

A toll plaza | File
A toll plaza | File

Toll collections witnessed a marked improvement on the back of increased movement of both passenger and commercial vehicles which have picked up significantly over the last three months, thereby surpassing pre-Covid levels, according to

On average, the increase in toll collections in September to November 2020 stood at about 13 per cent, implying growth in traffic of 8 to 9 per cent in terms of passenger car units.

One-third of this growth is contributed by the passenger vehicle category and the remaining from commercial vehicles, said

With this sustained improvement, the overall reduction in toll collections for national highway projects can be in the range of 5 to 7 per cent in FY2021, narrower than the previous forecast of 10 per cent de-growth.

Shubham Jain, Senior Vice President for Corporate Ratings at ICRA, said strong liquidity buffers and quick recovery in traffic arrested major slippages in the credit profile of toll road assets.

"Few state annuity projects with weaker counterparty credit profile suffered due to elongation in the annuity payment cycle, thereby resulting in a stretched liquidity position," he said.

In FY2022, the traffic is expected to increase by 5 per cent and toll rates (WPI linked) by 3 to 4 per cent, resulting in an overall increase in toll collections by 14 to 15 per cent on a low base in FY2021 (given the impact of toll suspension in first 20 days of April 2020).

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Fri, January 08 2021. 14:49 IST
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