Bloomberg: Pune: Purva Chitnis: Sunday, February 5, 2017.
The Government of Maharashtra and construction firm IRB Infrastructure Ltd. have pushed back against demands by activists to terminate toll collection on the Mumbai-Pune expressway. After a non-governmental organisation (NGO) claimed on Monday that IRB Infrastructure has crossed the amount it has the mandate to collect by 2019, Maharashtra State Road Development Corporation (MSRDC) - the government’s nodal agency - says that’s not reason enough to close the contract.
There is no such clause to terminate the contract in mid-way. So even if the contractor recovers the money, whatever he earns above that, is the company’s profit. We are bound by contractual obligations.Kiran Kurundkar, Joint Managing Director, MSRDC
The present contract, which gives IRB Infrastructure the right to collect toll on the 90 kilometre expressway was inked in 2004, at a lump sum of Rs 918 crore for a 15-year period. Vivek Velankar, a Right to Information (RTI) activist and the president of the NGO Sajag Nagarik Manch has cited figures uploaded on the MSRDC website to claim that Mumbai-Pune expressway toll proceeds from August 2004 to December 2016 exceed the target of Rs 2,869 crore.
Velankar has sent notices to the chief minister and public works department minister of Maharashtra and the MSRDC, asking for action within 15 days. The group of activists says it will approach the Anti-Corruption Bureau if the government and its agency fails to act.
The NGO is pinning its hopes on a recent order by the Allahabad High Court which ruled that toll can not be collected on the Delhi Noida Direct Expressway, a view that was subsequently upheld by the Supreme Court.
Responding to the activists’move, IRB Infrastructure says toll collection on Mumbai-Pune Expressway is in line with the prevailing concession agreement.
Assuming that the project’s recovery is already done is completely wrong. All these issues had been taken into consideration and discussed at length with us by MSRDC, when the committee appointed by the government was looking into all these aspects such as exempting LCV or buy back of project.IRB Infrastructure Spokesperson
The Toll Formula
A toll collection agreement is typically calculated on the basis of the distance, capital expenditure and estimated traffic flow on the route. A back of the hand calculation works out to Re one per kilometre, per car, and Rs 3.5 per kilometre, per truck, on roads which have no bridges and/or tunnels, according to Ashish Agarwal of Equirus Capital.
For an expressway, the calculation could be higher since the capex is higher. Also, there is revision every year based on the WPI inflation.Ashish Agarwal, Director, Equirus Capital Private Ltd.
MSRDC is yet to respond to the notice and would take appropriate action after deliberating with the state government, its joint managing director Kurundkar said.
This is not the first time that the NGO has made an appeal to the government to revoke the Mumbai-Pune expressway toll concession agreement. A similar plea was made last year, which the group says has been ignored. “They are not even rebutting our claim or dismissing our data. They are just not responding,” Velankar said.