8/12/2019 Maharashtra State Road Development Corporation

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Maharashtra State Road Development Corporation

The new 6-lane Expressway between Bombay and Pune has oft been cited as a glowing example

of a successful BOOT project. The project which was originally slated to cost !"" #rores has

been rumoured to ha$e swallowed %s &"" #rores to date. The bul' of this cost can be bro'en

down into cost of land ac(uisition) cost of rehabilitation) and construction cost. The construction

cost is estimated to be about *"+ of the total cost.

, pecial Purpose ehicle /P0 called 1aharashtra tate %oad 2e$elopment #orporation

/1%2#0 was set up for the purpose of de$eloping road infrastructure in 1aharashtra. The

construction wor' for the new expressway was awarded by 1%2# to a major contracting firm

and they were granted a 3"-year period to reco$er their in$estment and earn a profit.

The Expressway was partially commissioned /first 45 'm0 in !""" and completely operational

/"" 'm0 in early !""!. By the end of !""!) the expressway was ser$ing daily traffic loads of

!""" cars and !"" truc's in each direction and by !"") about !""" Passenger #ar E(ui$alent

nits /P#s0 used the expressway e$ery day. 7hen the expressway was commissioned) the toll

charges were %s "" per car and %s !"" per truc' 8 bus for tra$el in a single direction. There

ha$e been three fare hi'es in 9 years ta'ing the one-way toll for cars to %s *) 4" and 6&

respecti$ely. The charges for hea$y $ehicles were similarly hi'ed to !4") !*" and 3"".

,t each hi'e in the toll charges) there was a slow-down in the growth rate of the number of cars

and truc's using the Expressway. The BOOT operators are now cautious about further increases

in toll charges. Expressway users on the other hand ha$e re(uested a discounted monthly plan

and a two-way toll tic'et at reduced rates. The BOOT operators howe$er are saying that they are

unli'ely to reco$er their money at current rates and therefore definitely cannot afford any discount

scheme or :season-tic'ets: for Expressway users.

The 1%2# now has to e$aluate this problem of %eturn on ;n$estment /%O;0 for the BOOT

operators and is re(uired to pro$ide guidelines for setting toll rates. The go$ernment 'nows that

any action is going to set the precedent for future BOOT projects and is also aware that large

pri$ate players that might be in the contention for BOOT ;nfrastructure projects are watching the

Expressway situation extremely closely. On the other hand) playing to the BOOT operators needs

could send a signal that the go$ernment was concerned more with the profits of large business

houses and not for the plight of the common man using the infrastructure facilities.