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LATEST NEWS UPDATES | Govt plans to make you pay highway toll forever-Dipak Kumar Dash

Govt plans to make you pay highway toll forever-Dipak Kumar Dash

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published Published on Jun 21, 2012   modified Modified on Jun 21, 2012

Highway users should brace for paying toll even after the private road developer or the government recovers the capital investment with the interest. A new plan finalized by the government has proposed that road users would pay user charge for "efficient" operation and maintenance of the highway stretches in perpetuity.

Under the new model, the highways ministry wants to levy a fee for projects taken up under short-term operation-maintenance-transfer (OMT) contracts for six to nine years, arguing that it has inadequate budgetary allocation to maintain highways. This is despite the government levying a cess on petrol and diesel for construction as well as maintenance of highways. Besides, the toll that the user pays has a portion earmarked for maintenance of the highway, which goes to the developer that could be the government, for the concession period.

"At present, we pay almost Rs 600-700 crore annually for maintenance of government-funded National Highways. Moreover, we don't have that manpower to keep tabs," said a senior NHAI official.

The ministry has also said that the OMT toll would help the National Highways Authority of India (NHAI) avoid revenue leakage and improve operation of highway projects. This fiscal, the ministry has planned to award around 3,020km - all public-funded stretches - through this route for their maintenance.

"The private player will collect the notified toll on behalf of NHAI. Once the capital investment is recovered, the user fee would reduce to only 40% of the prevalent toll since the private player would need much less to recover the operation and maintenance cost," said an NHAI official.

So road users will pay, say, Rs 20 every time they use the road during the 20-year contract term, and then shell out another Rs 8 in perpetuity for maintenance of the highway. Of course, the toll will rise annually to factor in the impact of inflation.

Backing the proposal, a ministry official said that projects are awarded via OMT mode would help improve the quality of roads and there is every probability that the NHAI and highways ministry would earn a premium or upfront revenue.

To push the award of projects and to ensure that procedural delays don't halt this, principal secretary to the PM, Pulok Chaterjee, is holding the meeting on Thursday.

However, the Planning Commission has already put a spoke in the expeditious awarding of OMT projects. Responding to an inter-ministerial circular issued by the highway ministry, the Plan panel has said that the total project cost (TPC) should include the original investment in creating the asset, minor and major maintenance for the OMT contract period. This has been objected by the ministry.

"There is no logic of including the original capital investment in the TPC. If we go by their suggestion the TPC would be high and for every project we have to take it to the PPP accounts committee for approval before awarding it. Moreover, we are only giving the project only for a short period," a ministry official said.

The Times of India, 21 June, 2012, http://timesofindia.indiatimes.com/india/Govt-plans-to-make-you-pay-highway-toll-forever/articleshow/14310043.cms


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