Maharashtra solid road projects

18 November 2012 | Mumbai

 

Maharashtra was one of the first states in India to actively involve the private sector in infrastructure projects. But the state has not displayed the same ingenuity in providing information and insight on the structure of these public-private partnerships or the financials that govern them.

IndiaSpend filed four rounds of Right to Information (RTI) petitions through the last 75 days but got just two responses. Information was sought on the amount of toll collected on the Mumbai-Pune Expressway, the Pune-Nashik highway, the Thane-Ghodbunder road and Thane-Bhiwandi road. Responses were received only for the last two queries. The answers actually beg more questions, show the larger opacity around which such transactions are executed and highlight the need for urgent reforms.

The state of Maharashtra has a road network of 2,41,000 kilometer (km). The state’s expenditure on roads has increased from INR 539 crore in 2005 to INR 2,368 crore.

In 1996, the state government decided to formulate a Private-Public-Partnership (PPP) policy to finance its Road Development Plan (1981–2001), which in turn called for about INR 26,000 crore of investments. The policy also led to the creation of the Maharashtra State Road Development Corporation (MSRDC) to undertake development of roads and related infrastructure, mostly with private participation.

MSRDC, from its date of inception (July 9, 1996), has completed 18 projects, with an estimated cost (final cost, not necessarily the cost when the project was kicked off) of INR 7,187 crore and actual expenditure of INR 6,822 crore. According to the Maharashtra Economic Survey, till September 30, 2011, MSRDC’s total toll income from partially and fully completed projects was INR 5,680.15 crore.

Now, to facilitate PPP projects, the state government has amended the Bombay Motor Vehicles Tax Act so that entrepreneurs/contractors could collect toll under the BOT agreement. Toll rates vary for different vehicles and are fixed for three years, with a clause permitting an increase of six per cent a year, after three years.

Separate toll rates for projects of up to INR 20 crore and between INR 20-75 crore have been finalized by the government. Toll rates for projects worth more than INR 75 crore are fixed separately.