How Toll Fee Exemption Goes Against the Polluter-Pays-Principle

On the lines of polluter-pays-principle, toll across cities is well justified, writes Darryl D’Monte.

Politicians, bureaucrats and motorists harbour a curious abhorrence when it comes to paying toll on highways, which has led to plaza attendants being beaten up or murdered in instances of road rage. Union Road Minister Nitin Gadkari is in favour of removing or reducing such tolls.

In 2011, for instance, two youths were held for shooting a Gurgaon tollbooth attendant dead, who had the temerity to ask for the original registration certificate for their Bolero vehicle, which was standard operating practice for vehicles to be exempted from paying tax. The fee was a nominal Rs 27.

In 2014, the Delhi High Court terminated 12 of 16 toll plazas on the Delhi-Gurgaon stretch. This was the first instance in India of tolls being discontinued before the expiry of the contract and set a bad precedent. Its termination was the culmination of a settlement between three parties involved – the National Highways Authority of India, expressway operator Super Connectivity and the lead banker, IDFC.

Campaign Against Toll

The antipathy to charges seems particularly severe in Maharashtra in general, and Mumbai in particular. In 2014, the BJP had “toll-free-Maharashtra” as its campaign pledge when it came to power with the Shiv Sena. Not that the Nationalist Congress Party (NCP) is any different: it has joined the political chorus for removing tolls across the state.

As a Rajya Sabha MP, Sachin Tendulkar last year wrote to Chief Minister Devendra Fadnavis to complain about highway toll posts being “road blocks” for motorists coming in and out of Mumbai. He urged the CM to revisit the policy “to reduce the physical and mental toll” on such citizens and asked him to lower the number of toll gates.

Exemptions Will Lead to Losses

A committee headed by a retired PWD official has estimated that by exempting all heavy and light-moving vehicles (LMVs) from tolls at Mumbai’s five entry points will cost Rs 2,021 crore, because Maharashtra will have to compensate the toll contractors who have 15-year agreements. The Maharashtra State Road Development Corporation (MSRDC), which built the iconic Bandra-Worli Sea Link (BWSL), has endorsed this abolition.

Last June, Maharashtra scrapped tolls for buses and cars at 65 toll booths across the state, requiring the cash-strapped government – which has debts amounting to Rs 3.33 lakh crore, partly due to such profligacy – to pay road developers and toll contractors Rs 9,000 crore over the next 25 years to compensate for their loss.

It could exempt only LMVs, which would require the state to pay contractors Rs 250 crore a year to begin with, gradually less till 2031.

Without batting an eyelid, officials have said that the populist decision will only be announced days before municipal elections in January 2017.

Motorists Versus the Contractors

However, around seven of 10 vehicles passing through toll posts are non-commercial, so the temptation to raise tolls for trucks and tempos will be high. Consumers of goods thus transported may end up paying for the largesse of the state.

According to a study by IIM-Calcutta and the Transport Corporation of India of Mumbai’s five entry points, the delays they cause cost Rs 6,260 crore a year by way of lost working hours, or 2 percent of the state’s GDP. By contrast, the tolls for LMVs amount to only Rs 222 crore a year. The report said that it was “therefore prudent to decide on cessation or continuation of the toll policy.”

Mumbai Entry Points Ltd, the contractor which also runs toll plazas on the BWSL, blames mismanagement by the traffic police and delays by the municipal corporation in providing infrastructure at gates. Besides, there are various exemptions: last August, 9.68 lakh vehicles were waived through the five points.

Motorists, on their part, believe that the state and contractors are making money by charging tolls. Certainly, the MSRDC’s recent decision to put up its toll collections on its website is welcome.

Why the Toll Shouldn’t Go

• Toll fee exemption may have a political chorus, especially in Maharashtra with parties across the spectrum united on the issue.
  
• Studies indicate massive monetary losses caused by delay at toll bridges.
  
• Revenue generated by toll plazas not enough even for their day-to-day maintenance.
  
• Transport experts on the other hand believe that to account for capital cost and maintenance, one-way fare on the road should be Rs 400.
  
• On the lines of ‘polluter-pays-principle’, the issue of toll on bridges is well justified.

Restricting Entry of Vehicles

In August, as much as Rs 33.42 crore was raised at the five entry points. However, in relation not only to the cost of building sophisticated highways but also their day-to-day maintenance, the revenue falls far short of needs.

The proposed 35-km-long coastal highway, from Kandivali in the northern suburbs to Nariman Point in the south, will currently cost Rs 12,000 crore but inevitably much more when it is completed in around seven years. Fadnavis last month promised that it would be toll-free.

Transport experts believe that to account for capital cost and maintenance – all modern highways need repairs, electricity, surveillance and so on – the one-way fare on the road should be Rs 400, which no motorist would pay.

As it is, some 125,000 cars should be using the BWSL by now, but only 45,000 are doing so. This means that the public is subsidising the motorists.

Yet another consideration, which has been tangentially highlighted in Delhi’s odd and even number plate system, is that all such penalties are also a means of reducing the use of vehicles for private commuting. As it is, Mumbai is fast catching up with Delhi in its air pollution levels.

Due to the predominant north-south pattern of commuting in Mumbai’s peninsula, the unrestricted entry of cars into the central business district in the south will cause tremendous chaos. Just like the “polluter pays principle”, the practice of imposing user charges for any public amenity, not just on highways, is well settled.

(The author is a senior Mumbai-based journalist.)

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