Slowing growth in toll collections a dampener for BOT road projects
Undoubtedly, a slowing economy is bound to reduce movement of goods and shrink road toll collections. So, with India’s gross domestic product growth slowing considerably to 5% in Q1 FY20 from 8% in the year-ago quarter, the fall in growth rates of road tolls is not surprising.
Rating agency Icra Ltd forecasts a flat or marginal increase of 4.5% in FY20 traffic and toll collection growth over the previous year for its sample of 35 special purpose vehicles for road projects. This is worse than in FY19 when traffic and toll rates grew at 2.4% and 6%, respectively.
What’s rather worrisome is the timing of the slowdown. Recent news reports said the National Highways Authority of India may revise the BOT (build-operate-transfer) model, which will be used perhaps for road tenders from FY21.
