Toll collection can’t be stopped on expiry of pact, says NHAI –
[2/5, 13:47] Sekarreporter 1: CHENNAI
Toll collection can’t be stopped on expiry of pact, says NHAI
Mohamed Imranullah S.
CHENNAI 05 FEBRUARY 2020 01:33 IST
UPDATED: 05 FEBRUARY 2020 01:33 IST
Authority tells HC that it is entitled to continue collection till recovery of capital costThe National Highways Authority of India (NHAI) has told the Madras High Court that collection of toll on national highways cannot be stopped on expiry of agreements entered with private concessionaires on Build, Operate and Transfer (BOT) basis. The authority claimed that it was entitled to continue the collection till full recovery of the capital cost of individual projects, even if it takes more than three decades to do so.
In a counter affidavit filed before Justices M. Sathyanarayanan and R. Hemalatha on Monday, the NHAI listed several components for determining the capital cost of a project and said, “The initially estimated year of capital recovery period or payback period of investment is always traumatised by unpredictable forces like rate of inflation, change in rate of interest, change in pattern of traffic, alternative options, emerging technology etc.”
The counter was filed in response to a public interest litigation petition filed by Tiruchi-based advocate A. Joseph Sagayaraj to restrain the NHAI from collecting toll at Athur and Paranur toll plazas on the Tambaram-Tindivanam section, since the concession agreements had come to an end in November 2019. His counsel M.J. Jaseem Mohamed argued that unending collection of toll amounted to “tax terrorism.”
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On the other hand, explaining the process in detail, Additional Solicitor General G. Rajagopalan and Assistant Solicitor General G. Karthikeyan said the NHAI had entered into an agreement with GMR Tambaram-Tindivanam Expressways Private Limited on October 9, 2001 for carrying out four-laning of the stretch on BOT (payment of annuity) basis. The concession period was 17.5 years, including the construction period of 2.5 years.
The appointed date for the project was declared on May 9, 2002 and as per the agreement, the concession period expired on November 8, 2019.
Separate agreements
Further, between May 2005 and November 2019, the NHAI paid an annuity of ₹1,219.39 crore to the concessionaire at the rate of ₹41.856 crore every semester. Apart from this concession agreement, the NHAI entered into separate agreements with private entities for building toll plazas, operating them and collecting the toll.
Accordingly, user fee collection at Athur and Paranur toll plazas began on April 1, 2005, and till November 30, 2019 only ₹245.07 crore was collected from Paranur and ₹203.84 crore from Athur plaza. Stating that the total cost incurred for executing the project, indexed to the year of construction, was ₹922.61 crore, the law officers told the court that since only ₹448.91 crore had been collected so far from the two plazas, the balance capital cost of ₹473.70 crore was yet to be recovered.
It was further explained to the court that the capital cost was calculated by including the interest during construction, cost of land acquired for the project, rehabilitation and resettlement cost, cost of shifting of utilities and cutting the trees, cost of compensatory afforestation, maintenance work carried out to enhance durability of the highways. Also stating that toll was being collected as per rules, NHAI said: “After recovery of capital cost, user fee will be reduced to 40% as per rules.” The counter affidavit went on to state: “These projects pose another disturbing feature of long gestation period for recovery of the capital invested spanning from 15 to 30 years and necessitate incurring of periodical maintenance expenditure also to sustain the steady stream of expected revenue… It is not always possible for the Government of India or the State government to fund all such projects out of their tax revenues alone.”
After hearing both sides, the judges said refusal of vehicles with political party flags to pay the toll also appeared to be one of the reasons for delay in recovering the capital cost. Hence, they directed the NHAI to file by March 23 a report on the hurdles faced by it in strict implementation of Rule 11 of National Highways Fee (Determination of Rates and Collection) Rules of 2008 which provides exemption only to President, ministers, judges and a few others.
