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Draft road policy proposes fuel cess, levies

Special Correspondent

Mons Joseph released the draft road development policy on Thursday.

THIRUVANANTHAPURAM: The draft Kerala road development policy, released by Public Works Minister Mons Joseph here on Thursday, proposes introduction of a cess on fuel, levy on utilities and services on road sides and a deterrent fee on luxury vehicles to fund higher levels of road development over the next 12 years.

The draft, prepared by a task force headed by consulting transport planner Arun Herur, emphasises improvement of quality of existing roads, development of a north-south transport corridor and development of missing links of the hill highway and coastal roads.

The draft policy estimates an outlay of nearly Rs.54,000 crore for road development over the next 12 years, which works out to be an annual requirement of about Rs.3,000 crore during the first two years and Rs.4,700 crore during the next 10 years. Of this, Rs.550 crore is to be raised as additional revenue into the Road Development Fund through user fee and other levies.

The draft proposes that the government should amend the Road Development Fund Act to enable the fund to function and operate as an autonomous financial institution. There is a potential to mobilise more than Rs.100 crore to the fund a year if tolls are introduced on the improved network of State highways.

Currently, 10 per cent of the motor vehicle registration fee amounting to Rs.30 crore goes into the fund every year. This should be increased to 20 per cent. The provisions of the Highway Protection Act could be used to mobilise additional revenues. As development of highways results in enhancement of land values, 10 per cent of revenue earned from land registrations and transfers besides fee for granting changes in land use should be allocated to the fund. In addition, traffic fines and access charged should be transferred to the fund.

Further, the draft proposes that Rs.1.50 a litre could be imposed as a State cess on fuel in addition to the national fuel tax levy. A one-time levy of rental charge for five years should be considered for allowing utilities and services to be located within the right of way of State highways. As vehicles with engine capacity exceeding 1,500 cc occupy more road space and emit more greenhouse gases, a one-time deterrent fee of Rs.1,000 could be charged at the time of registration.

It notes that the design and development of the north-south transport corridor has the potential for private sector participation. The government should initiate a techno-economic feasibility study to identify the corridor alignment.

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