Traffic crawling back to pre-Covid level, highway construction may decline: Report

Crisil said highway construction may decline by 10-13% overall as compared to last year after key construction months were lost in the lockdown .
Ratings agency Crisil said in a report on the road sector that electronic toll collection has reached nearly 75% of the pre-Covid lockdown level.(HT FILE PHOTO)
Ratings agency Crisil said in a report on the road sector that electronic toll collection has reached nearly 75% of the pre-Covid lockdown level.(HT FILE PHOTO)
Updated on Jul 22, 2020 08:36 PM IST
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Hindustan Times, New Delhi | ByHT Correspondent

Traffic on national highways is bouncing back with electronic toll collection reaching nearly 75% of the pre-Covid lockdown level as curbs with the lifting of curbs while highway construction may decline by 10-13% overall as compared to last year, ratings agency Crisil said in a report on the road sector on Wednesday.

The sector is giving mixed signals on recovery, the report noted. Toll collection at national highways in June has rebounded to its March level and touched 75% of February level, the report said.

It also said regular traffic on highways had dipped by nearly 88% during April.

“The Covid-19 pandemic-induced lockdowns had virtually halted movement of people and goods in April and May, but curbs are being lifted slowly and the economy is beginning to hum…For an idea of how hard the pandemic had slammed the brakes, toll collection had dropped off the cliff from 11 crore vehicles paying in February 2020 to just 1 crore in April,” it said.

The Covid-19 pandemic-induced lockdowns had virtually halted movement of private vehicles and slowed the movement of goods in April and May. The Centre had issued multiple advisories to states to enable movements of goods.

“The overall ramp up in toll collection has been faster than initially envisaged, the trends are encouraging so far and sustained for more than two months indicating that it is not only due to pent up demand. The average toll collections in the last fortnight of June, 2020 surpassed 90% of pre-Covid levels for many stretches,” said Rajeshwar Burla, Vice President, Corporate Ratings, ICRA Limited.

The report also noted national highway construction spiked after a slump in April.

“Construction across national highways is picking up, too. It rebounded to 637 km in May from just 210 km in April. But key construction months were lost in the lockdown and labour migration continues to pinch. Normalcy might return only after the monsoon. Overall, we are bracing for a 10-13% decline in highway construction on-year this fiscal,” it said.

During the period, Centre increased spending on highway projects and spent 18,700 crore in April-May which is more than a 46-fold jump from 400 crore in the same period last fiscal, it said. “While this was mainly because milestone payments were made and to ease the cash flows of developers, it will have a trade-off – constrained future spending by the transport ministry,” it added.

Project awarding, too increased by three times from April to May compared with the corresponding period last year. “But that was because of a backlog of already bid-out projects that were awaiting award following the lockdown,” it said.

Around 9,000-9,500 km of highway construction has been completed till now while 7,000-7,500 km of work has been awarded, according to the report.

National highway construction in the current financial year stood at 10,237 km as compared with 10,855 km the previous fiscal while 8,911 km were awarded in FY 20 compared with 5,470 the previous fiscal.

“Net-net, while toll collection signal looks good, spending on roads may take a backseat given that priority in the rest of this fiscal will be on healthcare and social welfare spending. That would keep project awarding and recovery on a moderate path,” it said.

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Thursday, December 02, 2021