Rajeshwar Burla
Group Head - Corporate Ratings, ICRA Ltd
Rajeshwar Burla
Group Head - Corporate Ratings, ICRA Ltd
Only one-fourth of the road assets moved out of rough patch, post default
ICRAs study of 120 defaults in BOT Road projects reveals that lower-than-estimated traffic was the primary reason for default in case of operational projects and deterioration in financial profile of sponsor along with delay in securing RoW are the primary reasons for defaults in under-construction projects. With availability of long-term traffic data patterns across the country, the stakeholders are now better placed to validate the traffic assumptions. Further, with the implementation of FASTag through which 97-98% of toll collections are made, the toll leakages got arrested to a significant extent. However, with the countrys transportation network still evolving, both alternate route and mode continue to remain a major risk. Alternate modes of transportation such as DFCC, waterways, new road alignments like economic corridors under Bharatmala as well as upgradations of existing state highways could pose a potent threat.
