Did the state government wake up too late over the alleged irregularities in toll contracts? The Comptroller and Auditor General (CAG) had, in an over-a-decade-old report, pointed to private developers being given undue benefits and making windfall gains.
The CAG's audit report (civil) for 2000-01 reads like a sordid indictment of the policy to develop roads with the help of private entrepreneurs. These irregularities included adoption of unjustified traffic data, charging toll above the prescribed rate, non-consideration of annual rise in traffic, unqualified acceptance of vehicle census data furnished by entrepreneurs, errors in computing toll income and road users being taxed in excess.
After MNS chief Raj Thackeray's protest against the toll system, chief minister Prithviraj Chavan had on Thursday promised a new policy before the code of conduct for the Lok Sabha elections sets in.
The state had, in 1989, decided to encourage private participation in infrastructural development, and, in July 1996, the Public Works Department (PWD) laid down a scheme for private participation in road projects.
The CAG checked records of 27 works costing around Rs 357.96 crore, and noted: "As against an investment (excluding maintenance, interest on capital and toll collection charges) of Rs357.96 crore, entrepreneurs would collect a toll of Rs2,023.73 crore, during the concession period of about 8-16 years. Considering that the estimated toll collection is more than five times that of the investment, the estimated toll income appears to be unduly high. The government should review and prescribe norms as to what extent the entrepreneurs need to be compensated without unduly taxing the public and compromising the quality of works."
"Scrutiny of 11 offers revealed that the traffic data adopted by the entrepreneurs for the purpose of computing the concession period was much lower than the actual traffic count made by the (PWD's) divisions," said the report.
The report said potential increase in volume of traffic in subsequent years was not taken into account by entrepreneurs while computing data for assessing toll income. This resulted in undue benefit of Rs1.21 crore to them.
"...the exclusion of interest on toll income and calculation of interest on investment on a monthly/quarterly basis instead of an annual basis resulted in excess concession periods ranging from 5 months to 9 years than the admissible periods. Such long concession periods gave scope for collection of extra toll of Rs533.71 crore to the entrepreneurs in 21 works," the report said.
The CAG had also pointed to deficiencies in the construction and maintenance of the Mumbai- Pune expressway. Toll collection on it started from May 2000 and this was awarded to Ideal Road Builders (IRB) in May 2000.
"As per estimates, revenue expected to be collected was Rs355 crore for three years (Rs59 crore for 2000-01, Rs138 crore for 2001-02 and Rs158 crore for 2002-03). Against this, the actual toll remitted by the party was Rs107.01 crore (32 per cent) during 2000-03," said the CAG's commercial report for 2004-5.
"The Mumbai-Pune Expressway work was undertaken and executed without adequate planning and control mechanisms. Contract management was deficient at all levels," the report said. "There were several deficiencies in the toll-collection-cum-maintenance contract, which were highly detrimental to the financial interests of the Company (MSRDC)," it said.