September toll collections cross pre-covid highs
The increase in toll revenues every year is a function of rising traffic numbers and annual toll rate revisions (roughly 4%)The last time 100 million vehicles were seen at highways was in February, a month before the covid-led lockdown
India’s highways are filling up yet again with commercial traffic peaking last month. Data on vehicle movement and toll collection on highways showed heightened activity in September, following a rebound in economic activity ahead of the festive season.
According to electronic toll collection data across national highways, compiled by the research arm of rating agency Crisil, more than 110 million vehicles hit the highways in September with collections of ₹1,941 crore. Electronic toll collections account for about two-thirds of the total amount across national highways. The last time 100 million vehicles were seen at highways was in February, a month before the covid-led lockdown.
Soon after, traffic numbers had crashed to 85 million in March, 10 million in April and 55 million in May, when inter-state and inter-district borders were sealed to contain the pandemic.
A Crisil report in early May had estimated the private sector to lose toll revenue of ₹3,450-3,700 crore in March-June, assuming 90% revenue loss in April, 60-75% in May and 30-40% in June. By late June, when most restrictions on the movement of goods were eased, highway traffic numbers began to recover.
“Since the steep plunge in April due to the suspension of toll collection during the lockdown, traffic has gradually increased with the phased opening of the economy," Isha Choudhary, director, Crisil Research, told Mint. “In September, toll revenue reached pre-covid levels and have been the highest this calendar year."
“We’ve also reached pre-covid levels for traffic on our highways," said Sudhir Hoshing, joint managing director, IRB Infrastructure Developers Ltd, one of India’s largest toll roads developers. “The traffic on Mumbai-Pune route is continuously growing and catching up with other stretches. Commercial traffic has risen more in the last few months."
The increase in toll revenues every year is a function of rising traffic numbers and annual toll rate revisions (roughly 4%). Generally, toll collections rise by 8-10% year-on-year. This September, toll collections witnessed year-on-year growth of 5-6%, showing modest increase in traffic numbers, after accounting for toll revision.
“Manufacturing and mining activity has gone up in the last couple of months, and they account for 65-70% of freight movement and commercial traffic," Rajeshwar Burla, vice president, corporate ratings, Icra, said. “Higher e-commerce sales during the festival season have also contributed to freight movement in September, though their configuration in traffic numbers is lower."
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