Toll firms incur ₹4.8 cr daily loss as collection stays suspended
13 build, operate and transfer NHs and 11 state highways in the 2 neighbouring states suffered loss of ₹1,060 cr till July 31
The farmers’ stir in Punjab and Haryana against the Centre’s three agriculture laws has led to toll suspension in 24 road projects, causing an aggregate revenue loss of ₹4.80 crore per day, according to rating agency CARE Ratings.
The projects — 13 build-operate-transfer (BOT) national highways and 11 BOT state highways — have suffered an estimated revenue loss of ₹1,060 crore till July 31 due to the ongoing agitation. The farmers, mostly from the two agrarian northern states, have been protesting against the three agriculture marketing laws, passed by the National Democratic Alliance (NDA) government at the Centre, for the past more than eight months. They laid siege to toll plazas and have been allowing free passage to vehicles.
Though their implementation has been stayed by the Supreme Court, the farmer unions have refused to budge till the three controversial laws are repealed. Barring a few toll plazas, toll collection on most state and national highways in the two states has remained suspended for the past several months. These BOT road projects are in addition to the highways managed and maintained by the National Highways Authority of India (NHAI) which has also suffered toll revenue loss.
There are no signs of the agitation ending anytime soon as both the central government and the farmer unions have not had any talks in the past six months. Bharatiya Kisan Union (Ekta-Ugrahan) chief Joginder Singh said they would not allow toll plazas to operate till the time the Centre accepts their demands. “They (private companies) collect money from people who are now benefitting from free passage,” he said, dismissing the revenue loss claims.
CARE Ratings, in a statement on Monday, said the disruption of toll collections for state projects since October 2020 accentuated with no fee collection at toll plazas since December. The NHAI, the nodal agency for development of national highway projects, had in July decided to compensate the private highway developers for their toll revenue loss, acknowledging the farmers’ stir as an “indirect political force majeure (FM) event”.
‘Projects may opt for termination’
It said nine out of NHAI’s 13 build-operate-transfer projects in Punjab and Haryana were facing liquidity constraints even prior to the FM event due to underperformance in toll collection.
It foresees these stressed BOT projects opting for termination of concession due to sustained force majeure. This is likely to comprise projects worth ₹4,800 crore opting for termination.
In the rating agency’s view, project termination risk is perceived lower for 11 BOT projects of Punjab Infrastructure Development Board (PIDB) with an aggregate cost of ₹740 crore. These road projects had relatively lower outstanding debt and were self-sustainable prior to the farmers’ stir.