The farmers' agitation against new farm laws has led to an approximate loss of Rs 600 crore in toll collection until January end, according to ICRA. As per the agency, even if the protests end by February, there would still be a steep decline of 30-35 per cent in toll collection on national highways in Punjab, Haryana and Delhi-NCR region for FY21, as compared to 5-7 per cent drop for rest of India. Adding to it, the protest has also put Rs 9,300 crore of debt at risk.
This would be a double whammy for toll road projects in Punjab, Haryana and Delhi-NCR region as their toll collection had already been impacted by COVID-19 pandemic.
As per ICRA, around 52 toll plazas [includes both public funded and BOT (built, operate and transfer)] for national highways (NHs) operated in Punjab, Haryana and Delhi-NCR have been directly or indirectly affected due to farmers protests. Until January 26, 2021, these national highway toll plazas would have incurred an estimated revenue loss of around Rs 560 crore; out of which approximately Rs 410 crore is estimated for BOT concessionaires. Besides, the revenue loss in state highway projects in these regions would be additional, the agency said in a report.
"Any possible damages to the toll plazas due to the protests would be an added cost burden for the concessionaires," it said.
ICRA said that the impact on fee collection at some of the toll plazas began from October 2020 onwards, but it intensified to no fee collection (free movement of vehicles) at all toll plazas in Haryana, Punjab and Delhi-NCR since December 12, 2020.
Prior to the agitation, the average toll collection per day at these plazas was estimated at Rs 7 crore.
Due to the impact of the COVID-19 pandemic, the performance of toll road projects remained subdued in June quarter of 2020, while the toll collections witnessed marked improvements starting September quarter of the current fiscal.
On impact on credit profile of BOT projects, which constitute almost 50 per cent of the NH toll plazas (26 out of 52 toll plazas) in Punjab, Haryana and Delhi-NCR, ICRA said that the outstanding debt for these 11 projects is estimated at Rs 9,300 crore. Of these, Rs 8,550 crore of debt is at a high risk of default while Rs 750 crore is rated as investment grade with low to moderate risk of default. Some of these entities also have debt service reserves (DSRAs) of around three months in place to use for such exigencies; however, this would have been completely used up by now, it said.
Out of ICRA's rated toll road portfolio, three of these have been impacted by farmer protests, out of which two are already rated in default category even before farm protests, while the third (rated [ICRA]BBB-(Stable)) has support from a stronger parent.
Thousands of farmers have been camping at three Delhi border points -- Singhu, Tikri and Ghazipur -- for over two months, demanding repeal of three agri laws enacted in September and a legal guarantee on minimum support price. Several talks have taken place between the central government and the farmers represented by the farm unions since October 2020; however, all talks were inconclusive. On January 12, 2021, the Supreme Court of India, suspended the Acts -[The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act,2020; The Essential Commodities (Amendment) Act, 2020] and formed a committee to look into the grievances of the protesting farmers. However, this has not resulted in any resolution so far and the toll plazas continue to remain impacted.
By Chitranjan Kumar
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