Government yet to get full mileage from toll roads

Toll roads which are run by the government and private operators, as part of the National Highway Development Programme (NHDP), are raking in the moolah. But toll charges are being levied on just 21 per cent of the highways operational.

As part of the programme, 56 toll-road stretches in India covering over 2,800 km have generated about Rs 800 crore in 2006-07. But the cost of maintaining these roads comes to about Rs 510 crore per year, which includes the cost of toll operations.

While over 50 toll roads are run by the National Highway Authority of India (NHAI), six are run by private operators under the build-operate-transfer (BOT) scheme. Under this scheme, a private operator builds and maintains a road for about 15 to 20 years, and gets to keep the toll income generated in this period, as per the rate set by the government.

Under the public-funded toll road scheme, the highways' authority gets toll collected by private contractors, who are also responsible for the maintenance of these roads.

The irony is that, under the NHDP, over 13,150 km of highways have been constructed, but only 2,800 km of stretches are toll roads. Further, the stretches where toll charges are levied are not more than 50 km.

"Though toll roads are doing well, the government is not able to exploit the (scheme's) full financial potential, because the stretches are small. If the length of the toll roads go up, the scheme will attract more players; even foreign participation may go up," said Vishwas Udgirkar, assistant director, Pricewaterhouse Coopers.

Vineet Agarwal, executive director, Transport Corporation of India, has similar views. "The majority of the toll roads are small stretches, exceeding not more than 30-40 km. The government should award larger stretches so that there are no traffic snarls and for greater cohesiveness," he said.

So far, the stretches operating under the BOT scheme have been attracting a lot of private participation.

"We started operating the Durg-Raipur 30 km stretch in June last year, and our returns have been good. Toll collections on this stretch have exceeded the official projections.

"Though this is our only completed BOT stretch so far, we expect good returns from the Delhi-Gurgaon Expressway also, which will be ready by September this year," said Subroto Chaudhury, executive director (business development), DS Constructions.

Others have similar opinions. "We are expecting at least 25 per cent more returns on the equity invested," said Ankineedu Maganti, director, Soma Enterprise, a concessionaire that will start operating the Pimpalgaon-Dhule stretch in Maharashtra soon. Maganti added that the concept of toll roads would pick up in a few years because private concessionaires were showing greater interest in BOT projects.

Experts also feel the government needs to change its tactics in order to make public-funded stretches as viable as the ones under the BOT scheme. "As there are more public-funded roads, the government should go in for toll audit to extract the maximum benefit out of them," said PwCs' Udgirkar. This, he said, would help the government in determining the actual financial position, as there is always a possibility that money could be siphoned off by the contractors hired by the highways' authority.

He added that, like in BOT projects, the government should offer long-term contracts to players for collecting toll on public-funded roads, which will ensure greater income.

HALF MEASURES

Under the NHDP, over 13,150 km of highways have been constructed, but only 2,800 km are toll roads

No stretch where toll is charged is more than 50 km

Toll charges are being levied on just 21 per cent of the highways operational

56 toll-road stretches covering over 2,800 km generated about Rs 800 crore in 2006-07