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    Published On : Tue, Oct 6th, 2015
    Latest News | By Nagpur Today Nagpur News

    Why our highway toll tax could soon be going up instead of going away?


    Nagpur: When we traveled from Nagpur to
    Amravati by road some months ago, it was shocking to see the amount of toll we had to pay for a short distance of 160 kms approximately. It was over Rs. 500/-! For all we know, it may have gone up already… (Added to the high rates, we found that the toll tax operators weren’t above some sleigh-of-hand deceptions. When you asked for return, two-way toll, they charged you around Rs. 80 and gave you a receipt, which like most people we didn’t check to read the fine print. When we were returning, we were asked to pay toll again. When we showed the receipt, we were told it was for one way!) And this high toll, for roads that weren’t so great in many patches – I am told it deteriorates even more once you cross Amravati and head towards Akola.

    High toll taxes in the state had become a hot election issue and many ruling party politicians – then in opposition – had promised to do away with them if elected to power. They were elected in a fair majority and are ruling, but we are still being tolled with toll. And make no mistake – these road taxes are going to go up soon, and continue going up…

    Why? What leads to this assumption?

    Read what rating agency CRISIL has to say about Indian highways –

    Around 7,500 km of highway projects — 5,100 km under construction and 2,400 km operational – awarded mostly between fiscals 2010 and 2012 on a build, operate, transfer, or BOT, basis, are at high risk today, says a report by Crisil.

    “Around 50% of the projects under construction are at high risk of not being completed because of significant cost over-runs and weak wherewithal of sponsors. ”

    “As for operational highways, 26 out of the total 80 are in no position to service debt on their own because of lower-than-estimated traffic. These projects, which are toll-based, span about 2,400 km, or 40% of total length of operational highways, and have an outstanding debt of Rs 17,100 crore,” the report adds.

    In simple language it means that the toll they have been collecting till now on highways all over India, have not been able to cover the cost of constructing them, as quoted by contractors.

    Another reason, the debt has mounted is that there are delays in meeting targets and therefore costs go up. If one looks at old figures given by government departments themselves, these road building contractors seldom meet even 50% of the target they promise to achieve while getting the tender. And then they go back complaining of cost over runs and are granted more budgets and more mega bucks. This seems to be a standard practise whether it is building roads or building dams! That is how the builder-politician nexus begins and then the ‘scams’.

    What we, Indian road travellers should worry about is how the present Transport Minister, our own Nitin Gadkari, has gone about helping the cause of the stalled highways.

    CRISIL has answered that question itself – “We believe the remaining ( highway projects) will benefit from proactive moves by the government to facilitate right of way and other clearances. We find the recent government move to ensure 80% right of way, or ROW, before a project is awarded very constructive,” Crisil says in its report.

    The report also says that government has announced a raft of policy measures to help both highway projects and their developers. “Of these, the removal of restriction on exit clause alone can allow developers to sell stakes in some projects and raise about Rs 5,000 crore. These funds can be used to turn around stressed projects, meet existing commitments and also as growth capital. A change of promoter in projects sold could also open up access to better refinancing terms …”

    Now why will a new promoter come in when the present one is under stress? Simple – he will get to charge higher toll for more years!

    Another fallout of Gadkari’s pro-development at any cost agenda will be at the cost of environment and already dwindling forest cover.

    As he himself says -“There were 283 stalled projects worth Rs 3.8 lakh crore at the time I took over the reins of the ministry… For two- and-a-half years, the previous Environment and Forest Minister did not sign a single file…majority of the projects were stuck on account of forest clearances and regulatory hurdles,” Gadkari said.

    He said ‘fast-decision making’, online clearances, policy intervention and other measures led to the roll out of majority of the projects barring 41 which were terminated and 10-12 of which are in final stages of roll out.

    Union Minister Nitin Gadkari also said that corrective steps by the Modi government have led to roll out of majority of the Rs 3.8 lakh crore stuck highways projects.

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