Demonetisation: Suspension of NH toll may lead to 460-crore loss

MUMBAI: Suspension of toll collections on national highways following the demonetisation move will cause a Rs 460 crore revenue loss to private road builders, resulting in a significant liquidity stress for the most-rated road projects and potentially impacting their debt commitments, credit ratings firm ICRA said.

Developers are likely to apply for compensation under the concession agreements, which allow them to claim losses if the aggregate financial impact exceeds Rs 1 crore and 0.5% of realisable fee, or force the extension of the concession.

With average daily collection around Rs 40 lakh, the loss of toll revenue for around 115 toll projects of the National Highway Authority of India operated by private players is estimated to be Rs 460 crore for the 10-day period after the suspension was imposed, ICRA said.


A majority of the highways do not have a sizeable accumulated surplus or a debt service reserve account and this will put these projects under stress, ICRA said.

"Loss of at least one-third of the monthly toll revenues is likely to result in inadequate cash flows to service the debt commitments for November and December 2016," said Shubham Jain, a vice president at ICRA.