Special Chief Secretary, Municipal Administration & Urban Development, Arvind Kumar explained that the TOT (Toll Operate Transfer) concessionaire for the toll collection on the Outer Ring Road (ORR) is not at liberty to increase the toll at his whim, and is bound by the NHAI rules.
Addressing a press conference organised on Wednesday to allay apprehensions about awarding the ToT contract, Mr.Arvind Kumar said the toll policy of the Telangana government is based on the National Highways Fee Rules, 2008, and toll collection on ORR will follow the same guidelines.
He defended the process of global tenders for awarding of the contract for 30 years, and said the bids represented the Net Present Value (NPV) of the future cash revenue estimates. NPV is arrived at after discounting inflation and overheads such as operation and maintenance expenditure, income tax, changes in working capital, interest on short term loans and other such.
“₹7,380 crore today is not of the same value as ₹7,380 crore in 30 years,” he summed up.
There will be review every 10 years, to go over the actual revenue realisation by the concessionaire, and if the traffic increases exponentially earning more than the model assumption, the agreement has a covenant for concession period to be brought down.
However, Mr.Arvind Kumar did not share the estimated toll collection for the 30-year period, also known as the Initial Estimated Concession Value (IECV), saying as per the NHAI terms adopted by the Telangana government, it cannot be disclosed. For the six months from this October to April next year, the estimated revenue is ₹308 crore, while for the subsequent financial year, it is pegged at ₹689 crore, he revealed.
Passenger traffic is estimated to grow at six to seven per cent for the first five years, gradually depleting to two to three per cent during the last five, he said.
Maintenance of greenery along the ORR, and establishment of new toll plazas will be HMDA’s responsibilities.
The TOT contract was awarded to IRB Infrastructure Developers Limited for the highest bid amount of ₹7,380 crore, among four competitors which included Adani Road Transport and present concessionaire Eagle Infra.
Given the ₹542 crore toll collection on ORR for the year 2022-23, several questions were raised about the throw away price for which the contract had been given, which Mr.Arvind Kumar sought to answer through the press conference. He also sought to dispel the controversy around selection of consultant, and the bidding process.
