Page 37 - TrafficInfraTech Magazine - Linking People Places & Progres

INFRASTRUCTURE

After the resumption of tolling suspended the toll collections
operation from April 20, as announced a. Concession extension granted –
by NHAI, the traffic on roads has still been 26 days without any O&M Cost
in the range of 40 to 60% compared to The sector will
normal traffic due to various lockdown (ii) Period thereafter when the survive and serve
measures and containment zones concessionaires resumed tolling but
restrictions across India. Some of were able to collect less than 90% the transportation
projects might have seen good traffic of average daily fee on account of need of the
increase in initial days of lockdown ease the effect of force majeure.
but that was purely caused by migrant a. the extension to concession country and more
worker’s exodus from major cities and period will be assessed based investment will
now the revenues are back to 50 to 60 on the losses in toll revenue
% of normal figures. and would be proportionately come through if
Year 2020 is getting proved to be adjusted against this extension, the government
worst year for the highway operators provided that minimum provides support
as there has already been a slowdown extension would be 3 months
in economy and then there was revision limited to a maximum of 6 and takes long
in axle-load norms hitting the industry. months. term horizon to
The traffic on roads sharply went down b. The eligibility period will be
causing huge losses to the tolling minimum 3 months and fight with COVID-19
revenue. The year on year traffic on maximum 6 months Impact.
roads from Q3 2018 has dropped from
positive 9% to expected negative 1% in c. Applicability of this circular is as
Q3 2020. So almost 10% de-growth in of now for MCA concessions
a 2-years’ time frame. and have not been extended to There is still a demand from the
older concessions. industry to consider December WPI for
While the Government is trying to toll rate revision (Due in July) as March
monetize more and more toll road Cash Shortfall Loan: NHAI has agreed WPI is fully impacted by COVID-19 and
projects under TOT (Toll–Operate- to provide a cash shortfall loan @ bank this will cause losses to the industry
Transfer) model and trying to attract base rate plus 2% (currently 6.45%) to which is already taking the hit of lower
more investment in the sector, the the extent of 1% of O&M cost plus debt
current situation can take away all the servicing and principle payment cost traffic and further support the O&M
shine which was created in last TOT reduced by the revenue collections. This cost during the announced suspension
bids, if the sector is not supported well will help the companies immediate cash period as a minimum.
and in time by the government. short fall issues and should solve the Disclaimer: The views expressed are based on author’s
problems of debt servicing and carrying personnel industry experience and do not represent
Recently the Government has the regular O&M. views of any operating companies in particular
announced a COVID-19 Relief Package
targeting some long term non cash
relief to the sector and this should help
the sector to sustain for some time.

The Government relief measures
as per Policy Guidelines circular no.
8.3.33/2020 dated 26th May 2020 can
be summarised as:
1. The force majeure periods have
been classified under two separate
events:

(i) Period from March 26, 2020 to
April 19, 2020 when NHAI had

www.trafficinfratech-com-500653.hostingersite.com April-May 2020 / TrafficInfraTech 37