Lesser Toll tax for ill maintained roads
The Economic Survey for 2013-14 stated that bad roads would mean a cut down on toll rates of that particular road. The survey spoke about the necessity to better contract mechanisms so that lower toll rates can be applied in situations where users do not get the required quality of service. Abiding by international practice, solutions like ‘traffic trigger’ and ‘re-equilibrium discount’ can be used in examining issues of Indian road sector to get rid of problems and also get needed solutions.
The re-equilibrium discount is a concept which is used in reducing tariff rates in cases where the performance factors are not met. There is a table of discounts which are prior decided in the contract. The pre decided discounts suggest the resources that have not been invested and hence resulted in a failure to meet public demands.
In India however it is a different scenario, legal interventions and political interference usually address concerns for toll roads. The Economic Survey also suggested on the requirement to look on the level of tolls being ceased. Toll tax should be interrelated with the payer concerning users’ capacity of paying and justifying pay back for financing entities. The traffic trigger concept is used to see whether certain volume of identified traffic is increased. If it happens the developer should increase the roadway capacity so that users get better service.
Source: The Hindu Business Line
