The Coimbatore Corporation’s decision to award the contract to collect toll at the MGR Vegetable Market on Mettupalayam Road for a sharp reduction in rate when compared to what it earned the previous year has raised many eyebrows.

The corporation had earned Rs. 1.25 crore during 2011-12 but the tender awarded for 2012-13 beginning May is for Rs. 81 lakh. Interestingly Abu Thahir, the contractor, has taken the contract for April alone for Rs. 10 lakh.

If for a month the Corporation is able to give on contract the toll collection rights for Rs. 10 lakh, it means that for a year it could give the same for Rs. 1.20 crore if not more.

The toll has to be collected from lorry drivers and traders.

In 2008-09, the Coimbatore Corporation earned Rs. 1.08 crore.

Five years later, the Corporation’s Finance and Taxation Committee has decided that the toll collection contract is worth only about 75 per cent of the 2008-09 value – Rs. 81 lakh. The committee at its Monday meeting passed a resolution to this effect.

The committee reasoned that the Corporation was forced to undervalue the toll collection contract because when it called for tender six times in the past, there were no takers. “The toll collection issue came up for tender on December 26, 2012, January 23, 2013, February 13, February 28, and on March 13.”

The final tender call was on March 28.

The resolution said that Rs. 1.25 core was the base value – the rate below which tender should not be awarded. But it also said that there were not many takers as the contract winner would have to pay income tax and service tax.

The highest bidder Mr. Abu Thahir would have to pay only the Rs. 81 lakh but would have to shell out Rs. 1.83 lakh in Income Tax and Rs. 10.01 lakh in Service Tax.

The resolution said that the Corporation did not have enough manpower to collect the toll by itself.Citing the aforementioned reasons, the committee led by Chairman R. Prabhakaran passed the resolution.Sources within the Corporation, however, said that it was just bad economics. The sources said that the Corporation Commissioner should investigate the matter. Commissioner G. Latha said that she would look into it.

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