Comments
In view of the ban on high denomination notes, the 10-day toll exemption provided by NHAI is expected to result in significant liquidity stress for most of the rated road projects, rating agency ICRA has said.
Only those road projects with a substantial accumulated surplus and having features such as availability of Debt Service Reserve Account (DSRA) will not have to face liquidity problems. However, such projects constitute a very small percentage of the operational projects and hence the credit impact on the sector can be substantial, the release said.
To avoid traffic jams at toll plazas, the NHAI had exempted tolling on its roads initially till November 11, which has been extended to November 18.
Vice-President of ICRA Shubham Jain said that loss of at least one-third of the monthly toll revenues is likely to result in inadequate cash flows to service the debt commitments for November and December 2016. Moreover, even post commencement of the tolling, the traffic levels are expected to remain lower initially on account of the overall low economic activity, he said in the release.
ICRA expects that the NHAI may opt for cash compensation, instead of an extension of concession, considering the financial troubles of the road developers. Nevertheless, there is significant uncertainty regarding the quantum, mode and timing of such compensation, he said.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.