Road projects, flyovers: A major scandal?

Mahesh Vijapurkar smells a scandal in the BOT model for road projects.

I am beginning to suspect that construction of road and related infrastructure like flyovers and bridges in out country could be a big scandal. Windfall profits may be available to those involved in this business which is best known by the acronym, BOT - build, operate and transfer.

Here is where my suspicion takes root: when the 50-odd flyovers were built in Mumbai to easily enable vehicles transit the multiple traffic signals which helped delay traffic and built up snarls, a charge was levied on their use.

People entering or exiting the city were asked to pay a toll. Periodically, as per a contract, an increment is allowed.

Misuse of BOT?

Any common sense approach would tell you that the idea behind the toll is to collect the cost of the construction, then maintenance plus some profit. For this, the toll is to be collected over a period because the costs, et cetera cannot be recovered overnight. When the government has no funds because it squanders elsewhere, this BOT model takes root.

But remember, the entire costing and revenue model is worked out after factoring in the usual bribes that are sought and paid, sometimes as a routine.

One critical element is the number of users. My fears are pitched on the number of users who pay for the facility. But how come the special purpose vehicles like Maharashtra State Road Development Corporation say they are in losses and officials ask that an extra levy on petrol be imposed to recover costs?

Everything seems so opaque!

When the plans were made and the contracts were drawn up, certain number of cars and trucks were reckoned as users and it is normally assumed that these numbers would only go up, regardless of the price of the vehicles and fuel also going up.

However, was it ever assumed that India's economy would grow at the pace it did and the number of vehicles it brought onto the roads?

Beyond expectations

We did not, because in the late 1990s when the flyovers were conceived and built, the economy was not as strong as it has been in the new millennium. It was assumed that everything would remain sluggish. Did we then underestimate the users?

We appear to have and thus over-collected the toll. More cars zip around and more trucks carry more to feed the growth machine which we seem to be now.

If that were indeed the case, then the toll collected now would have met the profits and the collections would now be meeting the profiteering needs of the establishment which always has a soft corner for the contractors.

Perhaps, it is time for an audit now and for the government and its agencies to say, 'yes, we have earned from this toll-business more than sufficient profits.' Failing to do so is to enable windfalls to the undeserving.

When windfall profits are the basis of private-public partnerships, then it is the immoral way of doing business. The government ought to be clamping down on that instead of winking at them.

But it seems none has cared because government is of the people, for the politicians, by the bureaucrats. Which is unfair, and the one single reason why our republic can go into decline sooner or later, if it already has not started sliding that way.

It appears there indeed has been some mischief of this kind in some parts of Maharashtra. The Marathi media has been writing about some serious aspects of this by pointing out that the authorities who can in some cases give a three-month extension for toll collection, have extended the license 'till further orders' which kept the scope for collection open-ended.

Windfalls

These concession agreements which address the issues of costing, maintenance and profits need to be revisited and from what has come out in the public domain, it is justified. These concession agreements were extended in as many as 23 locations for as many projects across Maharashtra and in some cases the collections have been much beyond reasonable recoveries.

For instance, the Pune-Saswad road cost Rs 11.63 crore (Rs 116.3 million) and the toll has crossed Rs 27.43 crore (Rs 274.3 million). The Saswad-Jejuri-Baramati road cost Rs 5.54 crore (Rs 55.4 million), the recoveries by way of toll has been Rs 11.05 crore (Rs 110.6 million) and so on and so forth. This is a dead giveaway.

The other point of note is that in some constituencies, which are known as VIP constituencies like Latur, Baramati, now Nanded -- no prizes for guessing why they have that status, the collection of the toll did not even commence in some cases. That was because the locals would not be happy.

Would rest of the road users in the country elsewhere who appear set to be called upon to pay toll in perpetuity be happy?

Not people-centric

I think not. Time, therefore, to ask the authorities across the country to come clean and end this toll -- a section of the Marathi media calls it the jiziya, a toll which the Moguls imposed on the Hindus.

What is happening in Maharashtra could well be true everywhere for roads are being built under the BOT model.

After all, all progress has to be designed to be people-centric and the benefits that accrue to the investor and developers -- and if we generously allow the officialdom and the politicians to wet their beaks a bit -- have to be incidental.

Nothing at the cost of or the neglect of the citizens ought to be the philosophy. But that is nowhere to be found.

Mahesh Vijapurkar is a senior journalist and commentator on people's issues.