The country's most-touted BOT road stretch's -- the 94 km Mumbai-Pune Expressway -- poor revenue generation from tolls on account of low traffic intensity has raised eyebrows on the potential of other build-operate-transfer (BOT) model road projects in the country.
Analysts place the blame for the lacklustre response to the Rs 1,630 crore project on the presence of a toll-free alternative-- the Western Ghat section of NH 4 -- between Mumbai and Pune and on shelving of the original plan to generate alternate sources of revenue, including setting up of a Rs 1,200-crore township alongside the expressway.
While MSRDC officials admit that toll collections has been much below expectations, they dismiss reports that they plan to sell of the facility immediately. Officials contend that the high-speed road is still not entirely operational and since the facility is on a 30-year concession period, it is way too early to write it off as a failure.
According to industry sources, MSRDC is pinning its hopes on a Rs 650-crore bail out by the state government and also permission from the state government to liquidate its liabilities in the project.
"One of the main reasons for the dismal tolling results to the project can be attributed to the fact that it is not a captive project," a National Highways Authority of India (NHAI) official said. The toll-free alternative on NH-4 connecting Mumbai and Pune, which is being upgraded presently under the NHDP, has continued to retain commercial traffic resulting in a lower than expected turnout on the expressway, the official said.
The real test for the expressway would be when NHAI also starts levying tolls on the NH-4 section, according to analysts. Implementation of international standards in terms of access control for the project by MSRDC has also been a grey area, with cases of stray animals, slow moving traffic, repair cordons on the carriageway and people who break the fencing barricades has been a disincentive for paying commuters, they added.
According to analysts, abandoning of the original plan of real estate development alongside the expressway is another significant reason for projections falling flat.
The Rs 1,630-crore cost for the expressway, which includes escalation on account of inflation and interest during construction, is much lower than the Rs 3,500 crore bid by Reliance Industries, which was the only bidder for the project. Reliance's bid was taking into account the revenue potential from development of real estate alongside the stretch, analysts said.
At Rs 2.8 crore per km, the construction cost is also significantly of MSRDC is below a Rites estimate of Rs 3.83 crore per km. Despite the comparatively lower cost of construction, MSRDC's decision to overlook the potential of frills like a township and other alternate revenue sources for the project has resulted in lower than expected traffic. MSRDC's lacklustre efforts at marketing the facility to traffic, especially the commercial segment of traffic has also been a problem, analysts said.
