Falling Toll Revenue: NHAI May Pay Rs 500 Crore To BOT Developers As Compensation
The National Highways Authority of India (NHAI) may need to provide compensation of around 500 crore to build-operate-transfer (BOT) concessionaires that operate national highways in Punjab, Haryana and Delhi-NCR. This follows his decision to declare the farmer unrest that impacted the collection of tolls as an indirect political event of force majeure.
The move will also mean an extension of the concession period equal to the period during which the concessionaire was prevented from collecting the toll charges.
The toll collection at 52 places has been affected due to the agitation of farmers which started from October of last year. An average toll of Rs 7 crore was to be collected daily at these places. The cumulative loss from the start of the protests until June 30, 2021, would be around Rs 1,600 crore, including Rs 400 crore on state-funded projects, according to Icra.
“According to our estimates, NHAI’s decision would cover around 40 to 45% of the revenue losses incurred by the projects concerned. The total toll loss for BOT dealers is estimated to be around Rs 1,200 crore until June 30, 2021, therefore the compensation payable would be in the range of Rs 450 to 500 crore, ”Rajeshwar Burla said of Icra.
In a circular, issued earlier this month, the NHAI said, in accordance with the concession agreement, in the event that the concessionaire is unable to collect the fee despite its best efforts or if the authority directs it to suspend their collection for the duration of such a case of force majeure. In this case, the concession period is extended by a period equal to that during which the concessionaire was prevented from collecting the royalties.
In the event of partial collection of free access when the daily collection is less than 90% of the average daily fee, the local authority extends the concession period in proportion to the loss of the fee on a daily basis.