Toll collections came under pressure during July-September with the slowdown in the economy affecting traffic. An FE analysis shows that a clutch of 17 road projects managed by IRB Infrastructure Developers and Ashoka Buildcon have seen toll collections falling 6% to R318 crore in Q2FY14 crore sequentially. Of these, 12 have registered a steeper fall in toll collections at 9.5% to R130.6 crore q-o-q.
The fall has worsened when compared with the same period of 2012-13. In July-September 2012, collections were down a mere 2% to R118.4 crore. Some of the prominent stretches impacted include IRB’s Surat-Dahisar, Bharuch-Surat and Pune-Nashik projects, among others, and Ashoka Buildcon’s Belgaum-Dharwad, Ahmednagar-Aurangabad, Indore-Edalabad and Katni bypass projects.
The second quarter is traditionally affected by the monsoon, slowing down traffic. This, coupled with slow industry growth, has affected toll collections even more. India’s GDP of 5% for FY13 was the lowest in a decade.
IRB, however, registered a year-on-year increase of 10% in total income to R967 crore in the quarter ended September 30, 2013, suggesting the impact of the decline in collections was limited. Also, the company increased rates in some projects and commissioned new ones, adding to revenues. On the other hand, due to slow execution, Ashoka Buildcon’s income fell 4% to R248.75 crore against R259.24 crore in the previous corresponding quarter.
“Toll collections have always has a correlation with the economy. As you see, in a slowing economy, tolling revenues are also falling. At present, around 0.8 times is the correlation between traffic to GDP growth; so, if the GDP is down to 5%, it’s very natural to have traffic growth in the range of 4% depending on where the projects are,” explains Virendra D Mhaiskar, chairman and managing director, IRB Infrastructure Developers.
Some projects like Thane-Bhiwandi Bypass, Pune-Nashik, Nagar Karmala Tembhurni, Kharpada Bridge, Belgaum-Dharwad, Bhandara, Dewas bypass, Katni bypass and Pune-Shirur showed a fall in toll collections y-o-y, while in most other projects, collections have remained flat. On a full-year basis (FY12 vs FY13), three road projects — IRB’s Mohol-Mandrup-Kamptee, Ashoka Buildcon’s Ahmednagar-Aurangabad and Katni bypass — have seen a 2-5% fall.
Slower mining activity has also impacted some road assets. Toll collections on IRB’s Jaipur-Deoli project, for example, are affected due to the ban on mining of sand and aggregates in Rajasthan. The project, which commenced partial tolling from September 27, 2013, is seeing daily toll collections of R15 lakh as against the company’s estimate