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Road Transport and Highways Ministry may depend on toll revenue to invest in expansion projects

No Comments Sub Category:Delhi-NCR Posted On: Apr 10, 2014

The ministry of road transport and highways has started an exercise to estimate their revenue from toll collection to see if the government can build more roads with the help of its own resource. The PPP projects have been suffering of late and private players have been complaining of the low growth in the toll revenue.

An official says that this is useful for proceeding with the road development through cash contracts till the market conditions improves. The ministry is also focusing of new models like leveraging debt using this toll revenue for new projects.

An official says that they asked National Highways Authority of India (NHAI) to provide them details of the toll collected by them for the past 10 years.

He further says that this is implemented to assess the rate of growth in the toll revenue and noticed how much they get from public funded projects vis-a-vis the Build-Operate-Transfer (BOT) or PPP mode and whose performance will have an impact on toll. Mainly, it will be useful for understanding how the models could be twisted and a map for Engineering, Procurement, construction (EPC) projects be created.

Since 2004, the lengths of roads toll has gone north from 1,826-km to 6,660-km for public-funded projects and from 70.35-km to 6,585-km for BOT projects. This is responsible for an increase in total toll collection from only Rs 462 crore in 2004-05 to Rs 3,723 crore in 2012-13 – roughly 700 percent increase. Nearly 63 percent of this revenue comes from public-funded projects.

Another official says that the growth in the toll revenue is actually quite comforting for them. This means that they have sufficient revenue from this and also include the cess collection to go ahead with their road projects in the EPC mode instead of banking on public private partnerships, which is not doing well currently. They are planning to bring more roads under the tolling so that they can increase their earning and invest back into more roads development.

An official further says that they can act like a private concessionaire and also take the responsibility of getting the Operations-Maintenance-Tolling (OMT) done through the appropriate players. This is initial stage of conception and they are working out whether this is possible or not.

As the toll revenue amount can help to keep away the crisis. The current decrease in the private sector investment in highway projects has affected progress on the ground with the new projects finding no takers and projects which were awarded remaining stalled for want for finances.

Source: The Economic Times

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