1. More traffic drives up toll receipts

More traffic drives up toll receipts

Toll collections in the three months to June rose faster than in the year earlier driven by better traffic — both for trucks and cars —reports Shubhra Tandon in Mumbai.

By: | Mumbai | Published: August 31, 2015 12:30 AM

Toll collections in the three months to June rose faster than in the year earlier driven by better traffic — both for trucks and cars —reports Shubhra Tandon in Mumbai. Toll collections were up a sharp 15% to Rs 708.5 crore for a clutch of 17 road projects, including those from IRB Infrastructure, Ashoka Buildcon and Sadbhav Engineering.

Routes in western India remained busy thanks to movement from ports and other commercial traffic; container volumes for Q1 for the west coast grew by 4% y-o-y at 2.09 million TEU driving road traffic in Maharashtra, Gujarat and Rajasthan.

That has helped six of Larsen and Toubro (L&T)’s roads passing through Gujarat and Rajasthan. R. Shankar Raman, CFO, L&T, confirms toll revenues were up a blended 9% in Q1FY16, the majority of which was contributed by an increase in traffic. Shankar Raman is also enthused by the uptick in the number of commercial vehicles on the roads.

Virendra Mhaiskar, CMD, IRB Infrastructure Developers told FE traffic was up 12%-15% during the quarter thanks to a pick-up in port-related traffic as also more CVs ferrying cargo. “It should not be difficult for the volumes to sustain at these levels,” Mhaiskar told analysts recently.

For the three months to June, traffic on IRB’s Mumbai-Pune road–split equally between cars and trucks—, grew 18%. Analysts estimate, the IRB’s Surat-Dahisar stretch saw volumes increase 8.4% while Sadbhav’s Ahmedabad Ring Road route, which typically sees more cars plying, saw an increase of 8.8%.

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Encouagingly, roads in the mining belt — Chattisgarh, Odisha and West Bengal — have begun to show early signs of improvement in toll collections and traffic volumes. Ashoka Buildcon’s projects on National Highway 6, for example have seen both growing in the quarter with collections up nearly 10% y-o-y to Rs 233 crore.

“Ashoka’s Bhandara project has seen a traffic growth of almost 11%, Durg has witnessed an increase of nearly 6%, Belgaum-Dharwad has seen a traffic growth of over 6%, indicating some pick up in mining activity, which remained dull so far,” Nitin Arora, who tracks the sector at Emkay Financial Services, observed. However, in Sambalpur-Baragarh project the toll collection is way below expectation due to toll leakage issues, Arora pointed out. The company is collecting around Rs 11 lakh per day since the project is just 85% complete and expects to reach Rs 13 lakh per day on full completion. This will be only about half of what the company estimated to collect at the time of bidding for the project, which was Rs 25 lakh per day, he said.

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