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Anti-farm law protests cause hundreds of crores of loss to toll collections, debt of thousands of crores at risk of default: ICRA

The agitation against the historic farm laws, enacted by the Union government, will lead to an approximate loss of ₹600 crores in toll collection, reported credit rating agency ICRA Limited.

The agitation against the historic farm laws, enacted by the Union government, will lead to an approximate loss of ₹600 crores in toll collection, reported credit rating agency ICRA Limited.

In the report published on Friday, ICRA noted that the loss to toll plazas will be caused due to restrictions in vehicular movement on National Highways. “Around 52 toll plazas, including both public-funded and BOT (built, operate and transfer), for national highways are operated in Punjab, Haryana and Delhi-NCR which are directly or indirectly affected due to these protests,” it noted.

The report further added, “Until January 26, 2021, these national highway toll plazas would have incurred an estimated revenue loss of around ₹560 crores; out of which ~₹410 crores is estimated for BOT Concessionaires. Apart from this, the revenue loss in State Highway Projects in these regions would be additional.”

The revenue loss to toll plazas has furthered worsened since December 12 last year, due to no-fee collection from vehicles at all toll plazas in Haryana, Punjab and Delhi-NCR region. ICRA Limited reported that the average toll collection, prior to the protests and the subsequent free vehicular movement, was around ₹7 crores each day. The credit rating agency further estimated that even if the ‘farmer’ protests end by February, there will still be a decline of 30-35% in Punjab, Haryana and Delhi-NCR region for 2020-2021.

Cumulative toll revenue loss from October last year (Graph Courtesy: ICRA Limited)

Rs 9300 crores of debt on 11 BOT projects at risk

In its report, ICRA Limited emphasised, “Almost 50% of the NH toll plazas (26 out of 52 toll plazas) in Punjab, Haryana and Delhi-NCR constitute the BOT projects. The debt outstanding for these 11 projects is estimated at ₹9300 crores. Of these, three are rated by ICRA. Out of the ₹9,300-crore of impacted rated debt, ~₹8550-crore of debt is at high risk of default while Rs. 750-crore is rated at investment grade and have a low to moderate risk of default.”

Debt at risk for 11 BOT toll plaza projects (Graph Courtesy: ICRA)

The credit rating agency further said, “The inability to collect toll for a continuous period of 24 hours and exceeding an aggregate period of seven days in an accounting year due to agitations/ strikes would be considered as an indirect political event under force majeure…This would cover around 25% of loss of revenue incurred by the affected projects.”

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OpIndia Staff
Staff reporter at OpIndia

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