Toll rates are likely to increase 3-3.07 per cent in 2017-18, rating agency ICRA today said.
“ICRA expects the toll rates to increase in the range of 3-3.7 per cent during 2017-18 – the highest growth after 2014-15, following significant de-growth in toll rates for two consecutive years,” ICRA said in a statement.
The toll fees are revised annually to adjust for inflation, as determined by the movement in WPI, which links revenues of toll road SPVs to movements in the price index.
“The wholesale price index (WPI) increased to a 20-month high of 1.6 per cent in June 2016 from 0.8 per cent in May 2016. The y-o-y increase for the WPI index was positive for the third consecutive month in June 2016,” the statement said.
For 2017-18, the toll rate hike is estimated to be in the range of 3-3.7 per cent, Rohit Inamdar, Senior Vice-President, ICRA, said.
“While traffic is expected to increase by about 5-6 per cent… Overall, the growth in toll collection is expected to remain healthy at more than 10-11 per cent levels. With rising inflation, operations, maintenance and interest costs will also witness an increase. However, growth in revenues will be higher, resulting in improved profitability,” Inamdar said.
The rate revision for projects that were bid prior to 2008 is fully linked with WPI as opposed to projects that were bid post 2008.