Toll collections last year rose faster than in FY14, driven by better traffic volumes, reports Shubhra Tandon in Mumbai.
Toll collections last year rose faster than in FY14, driven by better traffic volumes, reports Shubhra Tandon in Mumbai. Vehicular traffic — both for truck and cars — picked up momentum thanks to which toll collections were up a sharp 16% to Rs 2,575 crore for a clutch of 17 road projects. These include roads developed by IRB Infrastructure, Ashoka Buildcon and Sadbhav Engineering. Routes in the western part of the country appear to have been busier, given the movement from ports; port traffic volumes rose by over 20% in FY15, driving road traffic in Maharashtra, Gujarat and Rajasthan.
Larsen and Toubro (L&T), which has six of its operational roads passing through Gujarat and Rajasthan has been a gainer. R Shankar Raman, CFO, L&T, confirms traffic was up some 15%-17% last year thanks to which toll revenues rose a blended 25% across the portflio.
Shankar Raman is also enthused by the uptick in the number of passenger vehicles on the roads.
Virendra Mhaiskar, CMD, IRB Infrastructure Developers, told FE that traffic volumes are up to early double digits now thanks to a pick-up in port-related traffic and a general economic recovery. “It should not be difficult for the volumes to sustain at these levels,” Mhaiskar told analysts recently.
For the three months to March 2015, traffic on IRB’s Mumbai-Pune road — split equally between cars and trucks — grew 18.2%. Analysts estimate that IRB’s Surat-Dahisar stretch saw volumes increase 8% while Sadbhav’s Ahmedabad Ring Road route, which typically sees more cars plying on it, saw an increase of close to 30%.
However, roads in the coal mining belt — Chattisgarh, Odisha and West Bengal — are yet to see any meaningful improvement in commercial traffic movement. Paresh Mehta, CFO, Ashoka Buildcon, explained last month that while mining activity was improving it hasn’t helped road traffic yet; collections on the Sambalpur-Baragarh stretch for example are at Rs 12.5 lakh a day, way below the estimated Rs 20-Rs 24 lakh, Mehta confirmed.
“The belt is still under pressure not merely because mining activity is dull but also thanks to the toll leakage on the Sambalpur-Baragarh, Durg and Bhandara roads, “ Nitin Arora, who tracks the sector at Emkay Financial Services, observed. That explains a lower traffic growth in some of Ashoka Buildcon’s projects on the National Highway 6.