Fastag collections on national highways for the financial year FY25 are projected to reach approximately US$ 8.63 billion (Rs. 72,500 crore), reflecting slower-than-expected traffic growth in H1 FY25 and a modest rise in toll fees, according to a report by SBI Capital Markets. The report anticipates a recovery in toll revenue growth for FY26, attributed to a slight increase in toll fees and favourable base effects stemming from mild traffic growth in H1 FY25. Additionally, national highway awarding activity in H1 FY25 experienced a slowdown due to adverse weather conditions and elections.
The Bharatmala programme has approximately 12,000 kilometres of awards pending, with over US$ 28.55 billion (Rs. 2.4 trillion) in costs yet to be allocated, primarily expected to be spent in Punjab, Kerala, and Andhra Pradesh. Construction activity during H1 FY25 also decelerated; however, the second half of the fiscal year, typically a stronger period, is projected to outperform H1. Despite this, construction estimates for FY25 are expected to remain below those of FY24. The report highlights that 70% of the monetisation potential is in national highway tolls, which could generate around Rs. 2.5 trillion for the central government is currently untapped. The total monetisation potential of the existing base of national highways is estimated at US$ 42.83 billion (Rs. 3.6 trillion), of which US$ 13.09 billion (Rs. 1.1 trillion) has been realised so far.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.