Re: Charging Toll on under construction highways - Ethical? The setting of toll for highways and role of PPP in developing roads needs to be examined in a more open manner.
The deputy chairman of the Planning commission is on record stating that any private concessionaire does not come under the ambit of the Right to Information Act.
This means that the operations of a private entity under the terms of the concession agreement and the concession agreement itself are free from public scrutiny.
This is unfortunate for two reasons, first, that the public is subject to various charges set by the private operator, which get revised periodically. For projects such as the NH8 Delhi-Gurgaon-Jaipur link and the DND Flyway in Noida, the hike in charges is linked to the Wholesale Price Index and the Consumer Price Index respectively.
No attempt is made to ascertain whether their margins are coming under pressure – unlikely since any rise in costs would be more than made up by the increase in traffic / advertisement revenues.
Secondly, that there is insufficient impetus on the efficiency of operations undertaken by the private operator. This is due to the fact that the measurement of performance as well as the placing of any penalties is the sole domain of the authority granting the concession, which in case of the NH8 project is NHAI.
The operating standards to which the private operator has to perform, if at all they exist, are unknown to the public and in absence of any regulator there can be no oversight on adherence to the same. This is demonstrated best by the toll plaza mess which can be seen at rush hours at the Gurgaon toll plaza on the NH8.
Some questions that need to be asked are – is the average time for processing of vehicles being tracked, what measures have been taken for implementing traffic controls like enforcing lane discipline, ensuring that the tag lanes only cater to tag holders, etc.
The private operator has many times put its hands up and said they are unable to fine any offenders due to lack of rules for the same. There is a clear need of some innovative methods to improve the efficiency with which vehicles are cleared from the toll plaza. These could be in form of staff with mobile ticket dispensers handing out clearance tokens to those waiting in line or even delaying those that do not have tags in tag lanes by 5 minutes by asking them to park in ‘sin bin’ slots.
We have seen that NHAI is the party benefitting from any PPP arrangement, by way of revenue share agreements / initial payment as well as the one setting rules and monitoring performance. That NHAI has been inefficient in both is a separate matter. There has also been criticism from private operators, notably DSC (that operates the NH8 link). There is thus a clear case for an independent regulator that can handle issues relating to NHAI and any private operators in a transparent yet effective manner.
There is a note of caution, however, as we have seen regulators in other industries, notably aviation (AERA) and power (DERC) bow to the ‘whims’ of private companies. AERA has granted the likes of DIAL with generous passenger fees and DERC has actually rewarded an inefficient operator to make up claimed losses with higher surcharges on consumers. From the moves of the regulators it seems that the adage of “Losses being socialized and profits being privatized” is holding true.
Since there is a lack of competition in such areas correct price discovery forms the core of what a regulator needs to evaluate. Thus any regulator in the Roads / highways space would need to closely scrutinize the concession agreements that have little by way of encouraging efficiency and more by way of assuring annuity revenues to private operators.
Encouraging open scrutiny by bringing these agreements into the public domain would be a good start. |