Plan panel tweaks toll to favour developer

Ignoring the directions of Supreme Court’s Monitoring Committee and overruling strong objections from Planning Commission Members, the plan panel has approved a 1.5-time increase in toll rates for Eastern Peripheral Expressway. This increase was proposed by CP Joshi, Minister for Road Transport and Highways, and the proposal was mooted by Deputy Chairman of the Planning Commission Montek Singh Ahluwalia’s advisor Gajendra Haldea.

The documents available with The Pioneer show that on several occasions, NHAI (National Highway Authority of India) officials objected to the proposal to increase EPE toll rates and said it was an attempt to help the developer of Western Peripheral Expressway (WPE), whose toll rates were less. The decision to create these two expressways followed a Supreme Court order in 1984 on a Public Interest Litigation on heavy traffic congestion and frequent road accidents in Delhi.

The WPE starts from Kundli and via Manesar, it reaches Palwal. The EPE too starts from Kundli and via Bagpat, Gaziabad and Noida, it reaches Palwal. Both expressways meant to de-congest Delhi have equal length of 135 km and were decided to be constructed on Build Operate Transfer (BOT) system.

The implementing agency of WPE, also known as KMP (Kundli-Manesar-Palwal) is the Haryana Government-run HSIIDC. The developer of this expressway is DSC Limited, owned by HS Narula and MS Narula. The construction started on 2007 and was supposed to be completed by 2010. But till date only 60 per cent of work has been completed, and it may take three more years for fruition. The toll rate of a car fixed for WPE is Rs 170.

The EPE’s implementing agency is Central Government’s NHAI. The project is still on paper and even bidding process has not started. Ignoring the direction of the Supreme Court-appointed Monitoring Committee, the new toll policy, which came into existence in 2008, raised the toll rate of EPE for cars to Rs 230. NHAI officials and Finance Ministry on several notes observed that the toll rates of the WPE and EPE should be equal.

“The toll rates of WPE and EPE should be kept at par to ensure that there is no diversion of traffic along WPE. Higher toll rates of EPE will lead to diversion of traffic towards WPE resulting in non-viability of the project and undue benefit to the concessionaire (DSC Limited) of WPE,” said an NHAI communication to Ministry on December 3, 2010, citing the direction of the SC’s monitoring committee.

One year ago Montek’s advisor Gajendra Haldea, who rules the roost in the powerful Infrastructure Division, mooted the proposal to the Road Transport and Highways to treat the EPE as a bypass. This was a clever ploy by Haldea, because as per the new toll policy, toll rates for a bypass can be 1.5-times higher than expressways. Sources say, after CP Joshi became the Minister of Road Transport and Highways, this proposal gained momentum. Several engineers objected to this proposal and said EPE was a new expressway and a 135-kilometre road could never be treated as bypass.

Treating the EPE as a bypass and increasing the toll rate 1.5 times would cost a car Rs 340 to cross the EPE, while the WPE, which has equal length, has only Rs 170 as toll for the same vehicle. This would lead to two situations. First, all the traffic would divert to WPE. Second, no bidder would come for construction of EPE, and give complete traffic monopoly to WPE. Strongly objecting to this dubious proposal, which clearly intends to favour the developer of WPE, Planning Commission Member BK Chaturvedi wrote to Montek that this proposal should go to Cabinet Committee on Infrastructure (CCI) for approval.

“If the PPPAC (Public Private Partnership Appraisal Committee) are to be overturned and matters which are delegated to it are to go to Cabinet afresh, we might as well abolish the PPAC….if higher toll rates are charged, naturally the bids will be better. But to that extent, people will be taxed more. There is also the worry that its usage may get limited and the purpose of making the bypass may not fulfilled.

“In view of above, I do not agree with the proposal in principle to review any decision of the PPPAC unless there is mala fides intension in it. I find none in the instant case. I feel that the project has already been delayed and we should go ahead with the current process,” said Chaturvedi on February 1, 2012.

Agreeing with Chaturvedi’s observations, Commission’s Member Secretary Sudha Pillai in a note to Montek on the very next day blamed Haldea for misquoting her. “I must also place on record my objection to the statement at para 9 of the note of Advisor to DCH (Haldea)…that I have supported the higher rate of 1.5 times. ….imposition of a higher toll rate will be contrary to Government policy and will not be in public interest…..The EPE is not a bypass but an Expressway….the draft OM (Office Memorandum) placed below is premature and full of wrong reasoning,” she wrote.

But after 11 days, ignoring the views of Finance Ministry officials and NHAI engineers and overruling the objections of his colleagues, Montek approved the dubious proposal mooted by Haldea to increase the toll rate of EPE, which would help the developer of WPE.

However Minister RTH (CP Joshi) has decided to take a different view which he is entitled to do. PPAC is an official level committee and Minister is not bound by it in going back to the Cabinet…..I feel we should apply the relevant rule, but we have to leave it to the Ministry to decide whether it is indeed a bypass. 

“The Ministry has proposed treating it as a bypass and applies the relevant rule. Planning Commission concurs with the proposal,” wrote Montek on February 13, 2012, giving green signal to increase the toll rate of EPE. This literally makes EPE non-viable and offers a bumper bonanza to DSC Limited, the developer of Western Peripheral Expressway.