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India's national highways may be getting congested because of rising number of passenger cars but the developers seem to be bleeding due to sharp decline in the growth of commercial traffic, particularly trucks. There has been more than 50 Percent fall in growth of traffic on highways in the past two years in comparison to the trend of five years prior this period, indicates a study by CRISIL Research.

The report says traffic growth has slowed to about 3-4 Percent in 2012 and 2-3 Percent in 2013 compared with 7-8 Percent in 2007-11. Moreover, the base traffic - in the first year of tolling - on many highways has been well below estimates made by NHAI. In the case of 6 national highway stretches, base traffic was found to be 20-40 Percent lower than estimated.

The analysis of 15 NH stretches by CRISIL has shown that the commercial traffic growth decelerated to 2-3 Percent per cent in 2012 and declined another 1 Percent in 2013. The agency has cited economic slowdown and poor industrial growth as the reasons for fall in traffic growth which is hurting the earnings of developers.

Though the growth of number of passenger vehicles - cars and jeeps - has been healthy at 15 Percent, the developers have been impacted by the fall in number of commercial vehicles- the source of 75 Percent of their earnings. In terms of number of vehicles, the share of passenger and commercial vehicles is roughly equal, but commercial vehicles pay higher toll with trucks and multi-axle vehicles contributing the most to toll revenues.

"Our estimate is that overall traffic growth has remained weak in the current fiscal 2014 and will continue to languish around 3-5 Percent over the next 12 months," said Prasad Koparkar, senior director (industry and customized research) of CRISIL.

CRISIL has claimed that a region-wise traffic composition shows that apart from north, which has 50 Percent share of passenger traffic in toll revenues, all other regions see 85-90 Percent toll revenues coming from commercial vehicles. It said higher passenger traffic on toll road stretches in the north is due to tourist and religious destinations, while higher commercial vehicle traffic in the east and central India is because of high mining activity. Proximity to ports and high industrial activity are the major drivers of commercial vehicle traffic in the west and south.

The agency has found that delays and cost overruns is another worry for road developers. Of the total 78 BOT projects completed between 2000 and 2013, 61 projects faced delays, with the average time overrun at 10.5 months. The situation has only worsened in the last couple of years. Execution hasn't begun for about 33 projects awarded in fiscal 2012, aggregating 4,650 km and roughly two-thirds of the total length awarded that year.