BackNHAI collects Rs6,380 crore in toll revenue in Apr-Sep
Increase in revenue from toll collections to help ministry's plans of focusing on EPC model
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New Delhi: While private sector interest in the road sector continues to remain muted, the healthy increase in revenue from toll collections of national highways might help lift sentiment.
The National Highways Authority of India (NHAI) has recorded a 17% increase in toll collections year-on-year in the first six months of the current fiscal year.
NHAI, the implementation arm of the roads ministry, has collected ₹ 6,380 crore in toll revenue between 1 April and 30 September. It had collected ₹ 5,450 crore in the same period last year.
“This year, we are seeing a healthy trend in toll collections. Usually, toll collections would go up by 5-6%, but this year it is around 17-18%, which is good," a ministry official said on condition of anonymity.
The increase in revenue from toll collections will help the road ministry’s plans of focusing on the EPC (engineering procurement and construction) model, which is funded by the government and also send a positive signal to the private sector.
The increase in toll collections is largely on account of two factors, said a second government official, who also did not want to be named. A good number of freshly completed highway projects have been added to the tolled length and leakages in toll collection have been reduced, he said.
“A large number of projects being currently tolled are PPP (public-private partnership) projects and meticulous monitoring by the private players minimizes leakages in toll collection. It is usually seen that there are more leakages in government managed projects. The other reason is that more stretches have come under NHDP (National Highway Development Programme) and that has added to the revenue. However, one must do more analysis to understand if this increase could be linked to increase in traffic numbers," said Pranavant, a director at Deloitte Touche Tohmatsu India Pvt. Ltd, a consulting firm. He uses a single name.
However, there are some concerns that given the current trend of award of highway projects, the toll collections could flatten in the subsequent years. NHAI awarded projects for just 1,436km against a target of 4,000km in the year ended March. In the previous year, it could award just 1,116km against a target of 8,000km.
Overall, NHAI’s toll collection in the year ended March stood at ₹ 11,387 crore.
“Considering that investments had slowed down, NHAI’s focus has been on completing road projects over the last two years. So even though award of projects was low, length of roads constructed remained healthy, which were added for tolling," said the second official.
The ministry constructed 1,901km of roads in the fiscal year ended March and 2,844km in the year before.
Experts say the rise in toll collection is good news for the government, which is struggling to revive private investment in roads.
“Buoyancy in the toll revenue is a good sign for the private sector and comes at an opportune time for the government," said Abhaya Agarwal, a partner at EY Llp who oversees the infrastructure practice at the consultancy. “It could lead to the recovery of investment sentiment in the road sector."
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