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Rating agency ICRA on Tuesday said that toll road projects in the country are likely to see moderate to high single-digit growth in FY24 with moderation in the Wholesale Price Index (WPI) inflation.
India’s toll road projects saw a 17-20 per cent growth in FY23.
Toll rates and traffic volumes are the two variables that decide toll collections, the rating agency said in a statement.
The rise in toll rate is linked to the WPI while the traffic volume is linked to underlying economic activity, primarily manufacturing, construction and mining.
For the projects that were bid post 2008, the toll rate is revised annually in April at three per cent fixed rate plus 40 per cent of the change in WPI for December.
Hike in toll rates for the projects bid prior to 2008 is 100 per cent linked to the March WPI (toll rate revision happens in July or September each year).
“The WPI for December 2022 is 5.0 per cent (against 14.27 per cent in December 2021) translating into a toll rate increase of 5 per cent during FY2024 for the projects which are linked to three per cent fixed rate plus 40 per cent of the change in WPI,” Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, said in a statement.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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