Suspension of toll collection on National Highways since November 9 is unlikely to impair the debt servicing of at least 70 per cent of the operational toll projects, says India Ratings (Ind-Ra).
The anticipated shortfall for all these projects in interest servicing is likely to be Rs 85.40 crore, against which their cash debt service reserve account (DSRA) balance is Rs 388 crore along with cash balance of Rs 88.40 crore, which will provide a sufficient buffer, it said.
"Timely servicing of debt will be ensured by the surplus cash balances that some of these projects have. In certain cases where the sponsor has been supporting regular debt service, such support will continue even for the period for which the road is not tolled," Ind-Ra said in a statement.
Even as the management and the sponsors have also confirmed for majority of the projects, the support will continue. If the embargo on tolling continues beyond December 2, some projects' debt serviceability can be impaired, it said.
"As per the provisions of the concession agreement, the non-collection of toll which is a directive of the government could be construed as a force majeure event. Therefore, on account of suspension of tolling, the concession period could be extended for a period equal to the length of the period for which toll could not be collected," it opined.
Further, according to the concession agreement, force majeure costs shall include interest on debt, operations and maintenance costs and all other costs directly attributable to such event but shall not include any debt repayments payable by the SPV.
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