The alternative to high tolls over a long period is in ensuring that such projects are better monitored and contractors held accountable

Road tolls have become a red rag for Maharashtra’s Opposition parties. Among the first in the country to privatise road construction, the State is now facing protests which range from sporadic violence to agitations led by the Shiv Sena and its rival, Raj Thackeray’s Maharashtra Navnirman Sena (MNS). The Bharatiya Janata Party (BJP) has even promised to make the State toll-free if voted to power.

Ironically, road privatisation in the State was introduced in a major way when these political parties were in power. Build-Operate-Transfer (BOT) projects boomed during the Shiv Sena-BJP regime which ruled from 1995 to 1999. Former BJP president Nitin Gadkari was then the Public Works Department (PWD) Minister who ushered in the era of road privatisation.

Since then, 137 private road projects have been cleared in the State. These account for a road length of 4,685 kilometres, just two per cent of Maharashtra’s developed road length of 2.42 lakh kilometres. However, it’s these private roads which link major junctions and highways especially to the State’s big cities.

Both the Shiv Sena and the MNS allege that the public is being fleeced by exorbitant and unjustified tolls, and that the money generated is being siphoned off instead of being used for road maintenance. Allegations of a political nexus between the ruling parties and contractors have also muddied the debate.

Before political parties entered the picture, anti-corruption crusader Anna Hazare led an agitation against road tolls in 2011. He demanded the scrapping of at least 20 of the State’s 174 toll booths. “In many cases the toll contract itself is unfair because it’s based on low traffic projections. Second, the government rarely monitors tolling agencies or checks how many vehicles have passed through the toll booth. So, there is room for manipulation,” alleges Vishwambhar Choudhari from Mr. Hazare’s movement.

Lack of monitoring

Two official reports do point to the lack of monitoring in road contracts. The Public Accounts Committee (PAC), whose report was tabled in the State Assembly in December 2013, said there were instances where the toll operator continued to recover money from road users even though the recovery period had lapsed. In most cases, the toll collected was not used for road maintenance, it said.

It listed the example of the Khamgaon-Jalna Bypass Link Road, saying: “During the period of toll recovery, the contractor did nothing to maintain the roads. He completed only 60 per cent of the work but recovered 90 per cent of the money and then disappeared.” Despite this, the contractor was not blacklisted.

In 2006, the Comptroller and Auditor General (CAG) 2004-05 report had indicted the high profile Mumbai-Pune Expressway. The project was built by the Maharashtra State Road Development Corporation Limited (MSRDC) but the toll collection contract went to Ideal Road Builders. In 2004, the company received the toll collection contract for a fee of Rs.918 crore. However, the CAG report said this was much too low. Even if only 60 per cent of the toll revenue was to be considered, the reserve price would have worked out to be Rs.2,236 crore,” it said.

Toll politics

Maharashtra has 174 toll booths. Of these, 40 are for projects of the National Highways Authority of India (NHAI), 79 for roads which come under the PWD and 55 for projects under the State utility, the MSRDC. Since the Nationalist Congress Party (NCP) controls both the Public Works Department (PWD) and MSRDC departments, it has become the main target of the toll agitation.

“There are many political interests involved with the contractors. Many politicians have also routed money into this,” alleges Dr. Choudhari. A retired PWD official even alleges that toll contracts are rigged by the State to allow only a monopolistic cartel of contractors to make the cut.

Among the pioneers in Maharashtra’s toll business was the construction company, Ideal Road Builders (IRB), whose founder Dattatraya Mhaiskar was considered close to then PWD Minister Mr. Gadkari. The firm received several large road projects during Mr. Gadkari’s tenure. The link came under scrutiny more recently in 2012 when it emerged that Mr. Mhaiskar had lent money to Mr. Gadkari’s Purti Power and Sugar Ltd. He later said the loan was given in his personal capacity.

IRB split into two entities a few years ago. IRB Infrastructure Developers is controlled by Mr. Mhaiksar’s elder son, Virendra. The second company is Mumbai Entry Point Ltd, controlled by the younger son, Jayant.

Virendra Mhaiskar says the allegations of political proximity to Mr. Gadkari or more recently to the NCP are unfair. “Making such allegations without any proof is unfair. We have already clarified that our company gave no loan to Mr. Gadkari,” he told The Hindu.

He also questioned why his company should be singled out by protesters when it handles very few projects. “We are handling only five projects in the State of the 19 in the country. There are many private players in this business. And the bidding process is strict and competitive especially for national projects which have an electronic bidding system,” he said.

Is there an alternative?

Senior State politicians point out that Maharashtra cannot afford to build highways without help from the private sector because it doesn’t have the money. “This is the system being followed even in the U.S. and China,” says PWD Minister Chhagan Bhujbal. NCP chief Sharad Pawar also says this is the only route to building high quality roadways quickly, which will then boost development in the State.

Since privatising road construction, the State has cleared projects worth over Rs.15,200 crore, money it cannot afford to pump into roadways on its own, senior officials say. “The demand to shut down toll booths and take on this liability is not practical,” officials point out. There are two types of private projects. The BOT route where the contractor builds the road and recovers his money through toll. And the other model, where the State utility funds the road and appoints a contractor to recover toll. The former is more in use.

The alternative then is in ensuring that such projects are better monitored and contractors held accountable. This includes enforcing a transparent bidding process and stringent tracking of toll recovery by State agencies. While some toll plazas track the vehicular count electronically, this system clearly needs to expand much more.

“The state also needs to ensure that contract conditions on road safety and maintenance are met. Allowing private players into the public domain does not mean the state can dispense with its own responsibilities,” says transport expert Sudhir Badami.

Chief Minister Prithviraj Chavan himself has admitted that there is need for more regulation. “Since no public hearing is taking place and the whole process of toll is not transparent, there is some anger among people. There should be a regulatory authority,” he told the media recently. Perhaps, a regulator is just what the State needs.

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