The National Highways Authority of India (NHAI) in its circular of July 2, 2021 considered the impact of the farmer unrest as an indirect political force majeure due to the inability to collect the toll for a continuous period of 24 hours and exceeding a cumulative period. seven days in a fiscal year due to unrest / strikes.
In accordance with the clause of the concession contract, NHAI would reimburse half of the excess amount of force majeure costs (including interest payments on debt and operating and maintenance expenses) beyond the coverage of insurance. This should act as a liquidity breather for BOT Toll projects.
ICRA had previously estimated the loss of revenue from the National Toll Highway projects (52 toll plazas) affected due to the unrest by farmers in Punjab, Haryana and Delhi-NCR at 7 crore rupees. per day. The cumulative loss from the start of the protests in October 2020 through June 30, 2021 is estimated at 1,600 crore with 1,200 crore for BOT toll projects and remaining for state funded projects.
Rajeshwar Burla, Group Co-Head and Vice-President, Corporate Ratings, ICRA, said: “This would cover around 40-45% of the revenue losses incurred by the affected projects. The total toll loss for BOT dealers is estimated to be around 1,200 crore until June 30, 2021, therefore the compensation payable would be in the range of ₹ 450-500 crore. NHAI would reimburse compensation after adjustment for insurance coverage. NHAI’s decision to pay 75% of the total claim amount immediately will provide liquidity relief for BOT-Toll projects.
During the second wave of Covid, NHAI’s empty circular dated July 1, 2021 extended until September 20, 2021 the deadline for cash relief provided to entrepreneurs under Atmanirbhar Bharat.
The impact of the second wave of Covid is expected to be limited.
In the first quarter of fiscal 2022, the execution amounted to 2,284 km compared to 1,823 km in the first quarter of fiscal 2021 and higher than the pre-Covid execution of 2,155 km in the first quarter of FY2020. ICRA expects execution to exceed 40 km / day in FY2022.