Toll credit rating,rates seen up

Analysing the impact of the high inflationary environment on the revenues of 21 operational toll roads,the Crisil Ratings’ report observed that their cumulative toll revenue stood at around Rs 1,000 crore last fiscal and said the same will grow by 20 per cent this fiscal,while road traffic is slated to log 10 per cent growth.

“Crisil believes that revenues for these toll road projects will grow by 20 per cent this fiscal. This growth will be contributed almost equally by revisions in toll rates and an expected rise in traffic volumes,based on our estimates of nearly 8 per cent GDP growth,” Crisil Ratings Director Pawan Agrawal said in the report.

Inflation has been unacceptably high since last year and edged closer to the dreaded double-digit level in May,after a brief respite,when it rose to 9.06 per cent,up from 8.66 per cent in April. Furthermore,food inflation,after a brief subside,flared up again to 9.13 per cent for the week ended June 11.

Adding more fuel to the fire was last Friday’s steep hike in diesel,kerosene and cooking gas prices,which will put immense pressure on headline and food inflation numbers.

With inflation remaining far outside the RBI’s comfort zone since March last year,it has upped its key rates ten times in a row,with the latest hike effected at its mid-quarter review on June 16,when it hiked short-term lending and borrowing rates by 25 basis points each to 7.5 and 6.5 per cent,respectively.

Citing the reason for this projection,Agarwal said,”The revenues of operational toll-road projects stand to benefit from the prevailing high-inflationary environment,given that revisions in toll rates are linked to the movements in inflation indices and traffic growth is relatively inelastic.”