The National Highways Authority of India (NHAI) in its circular dated July 2, 2021 has considered the impact of farmers’ agitation as indirect political force majeure event due to the inability to collect toll for a continuous period of 24 hours and exceeding an aggregate period of seven days in an accounting year due to agitations/strikes.

As per Concession Agreement clause, NHAI would be reimbursing one half of excess amount of force majeure costs (includes interest payments on debt and O&M expenses) beyond the insurance cover. This is expected to act as a liquidity breather for BOT Toll projects.

ICRA had earlier estimated the revenue loss to national highway toll road projects (52 toll plazas) affected due to the farmers’ agitation in Punjab, Haryana and Delhi-NCR at Rs 7 crores per day. The cumulative loss since the start of protests in October 2020 upto June 30, 2021 is estimated at ₹1,600 crore with ₹1,200 crore for BOT-toll projects and remaining for public funded projects.

Rajeshwar Burla, Co-Group Head & Vice President, Corporate Ratings, ICRA, said, “This would cover around 40-45 per cent of loss of revenue incurred by the affected projects. The total toll loss for the BOT concessionaires is estimated to be around ₹1,200 crore until June 30, 2021, hence, compensation payable would be in the range of ₹450-500 crore. NHAI would be reimbursing the compensation after adjusting for insurance cover. NHAI’s decision to pay 75 per cent of the total claim amount immediately will provide liquidity breather for the BOT-Toll projects.”

On second wave of Covid, NHAI vide circular dated July 1, 2021 has extended the timeline for liquidity relief provided to contractors under Atmanirbhar Bharat, until September 20, 2021.

The impact of second wave of Covid is expected to be limited.

In Q1FY2022, the execution stood at 2,284 km against 1,823 km in Q1FY2021 and higher than pre-Covid execution of 2,155 km in Q1FY2020. ICRA expects the execution to surpass 40 km/day in FY2022.

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