Logistics

Dedicated western freight corridor to impact Mumbai-Delhi NH-8 toll revenues

Our Bureau Mumbai | Updated on November 05, 2019 Published on November 05, 2019

The decline in toll collections on account of this shift (from both these routes) will adversely affect the ₹6,565 crore of debt in 2 out of the 8 operational Build-Operate-Transfer (BOT) projects   -  Bloomberg

The shift of freight movement from road to rail through dedicated freight corridors is expected to have an adverse impact on toll collection in the Mumbai-Delhi NH-8 route.

Ratings agency ICRA, in a report said that while the completion of the eastern and western dedicated freight corridors are expected to be the game changers, it is likely to witness a one-time reduction in toll collections by 11 per cent once the western dedicated freight corridor becomes operational in 2022.

This is due to shift in automobile, cement and container freight to this corridor, the ratings agency said.

Further, the eastern dedicated freight corridor will cause a 6 per cent decline in toll collections in the Delhi – Kolkata NH-2 route, ICRA said.

“The decline in toll collections on account of this shift (from both these routes) will adversely affect the ₹6,565 crore of debt in 2 out of the 8 operational Build-Operate-Transfer (BOT) projects,” said Shubham Jain, SVP & Group Head, Corporate Ratings, ICRA.

However, 6 of the remaining projects, will complete their concession periods during 2021-2023 and are expected to have minimal effect due to competition from the dedicated rail corridor. However, for the other two projects, which are expected to come under stress, the concession period is financial year 2027 and 2040.

Similarly, there are three BOT (Toll) road projects on the Delhi – Kolkata route with debt outstanding of ₹4,508 crore which are likely to be affected, the ratings agency added.

Published on November 05, 2019
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