Highway Authority’s public-funded projects see slowdown effect

December 17, 2013

MAMUNI DAS

The impact of economic slowdown is getting reflected in the latest bids of National Highway Authority of India for the rights to collect tolls from the toll plazas of public-funded stretches.

However, there are some exceptions.

Traffic on national highways indicates the economic activity of a region, and toll is collected from the road users.

Out of 17 stretches put on auction, response was received for 14 till Friday.

Based on the bids for these 14 stretches, NHAI will receive four per cent less amount next year, because only six stretches have received higher offers than the preceding year.

These six stretches include four in Uttar Pradesh and one in Andhra Pradesh.

The bid process involves firms quoting a fixed amount of money to NHAI to bag the rights to collect tolls for a period of one year from road users using a particular NH stretch, which could have one or more toll plazas.

The bidder who quotes the highest amount bags the bid.

Explaining the variation in bids, an NHAI official said, “Traffic surveys don’t capture local issues such as resistances to paying tolls. So, in some areas, there are lower bids.

There was no response to three bids. “In these bids, the existing contracts will be extended by three months,” the source added. The broad trend of drop in traffic is being seen in most highway projects. The toll levels being charged from users will be the same.

They will be revised upwards from April 1, linked with 60 per cent of the WPI inflation and 3 per cent simple interest rate. “When the toll rates go up, the bidders will pay extra to NHAI proportionally,” said the official.

This is the first time that NHAI has done the entire bidding process for toll collection rights for public funded projects – right from annual qualifying bids list to financial bid submission – happened online.

Earlier, such bidding process was followed for highway project awards and for operating maintenance transfer contracts.

Source-http://www.thehindubusinessline.com