Mumbai: Indian toll-road operators, which had been ordered to exempt all vehicles from paying toll for nearly a month due to the cash crunch created by the demonetisation drive, are yet to be reimbursed for their losses, senior executives at road companies said.

The National Highways Authority of India (NHAI) is in discussions to reimburse the toll-based operational road projects for the losses caused by the halt in toll collection during November and December, but there has been a delay in doing this which could strain the companies’ cash flows, the executives said.

“Some cost reimbursement has happened partially but they (NHAI) were supposed to replace the entire loss of toll-revenue, not just the cost alone," said R. Shankar Raman, chief financial officer of Larsen and Toubro Ltd (L&T), the country’s largest engineering and construction company.

“The payment processing for the loss of toll-collection is taking more time than we had expected," Raman said.

“We hope that before the end of the current financial year this money will come in, because we would not like to close an account for the financial year with a lower revenue on an unintended government action. To be fair to the sector the government should go ahead and disburse," Raman added.

Senior executives at Ashoka Buildcon Ltd, MEP Infrastructure Developers Ltd, and IL&FS Transportation Networks Ltd confirmed they were also waiting for reimbursement.

“The delay is a negative because we are servicing debt without revenue plus there is interest loss on delay in reimbursement," said a senior executive at a roads developer, who spoke on condition of anonymity.

Toll-based projects typically have monthly interest payment obligations and debt repayments on a monthly or quarterly basis.

A delay in reimbursement from the government could be a negative for some companies’ debt servicing while for others it may cause stress to cash flows, said Satish Parakh, managing director at road developer Ashoka Buildcon.

Toll road operators were mandated by the government to exempt all vehicles from paying toll across national highways between 9 November and 2 December to ensure smooth flow of traffic after the withdrawal of Rs500 and Rs1,000 banknotes on the evening of 8 November.

Toll collections resumed from 3 December but traffic volume had plunged on account of low economic activity.

Traffic volumes have since recovered, with growth ranging from 5% to 10% in February and March. Road projects had seen traffic growth of about 6% in fiscal 2016 and around the same in the first half of the current fiscal year. However, traffic declined in November and December on account of slow economic activity.

NHAI chairman Yudhvir Singh Malik did not respond to an email seeking comment sent on Friday.

NHAI had earlier told toll operators that it would pay them an interim amount and compensate the remainder in due course.

“Companies are lobbying NHAI and while the amounts will be paid, companies are negotiating for higher reimbursements than what the initial formula is suggesting," said a brokerage analyst, asking not to be named as he is not authorized to speak to reporters.

The initial formula suggests reimbursement of 90% of the project’s fixed cost i.e., interest, operation and maintenance, and repayments, this analyst said.

Under the concession agreement for road projects in India, companies can apply for compensation against such losses under a change in the law provision.

India has the world’s second largest road network of about 4.8 million km but national and state highways constitute a small percentage of that network.