Which road to take?

Feb 06 2013, 00:38 IST
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SummaryOver the past two decades, financing of road projects in India has undergone several changes.

India can learn from the experiences of other countries

Over the past two decades, financing of road projects in India has undergone several changes. For the government, public-private partnership (PPP) has become the preferred route for construction of roads. The National Highways Development Programme (NHDP), the largest road programme in history, envisages the bulk of investment to come from the private sector.

A predominant feature of private financing is collection of toll. In India, toll rates are calculated taking into account the base toll rate and the wholesale price index and are indexed to the estimated project cost in the case of high cost structures.

Road users have to pay tolls in addition to paying a fuel cess and vehicle charges; yet they do not receive the desired level of service quality. Roads have been constructed in patches, leaving little impact on long journeys. In addition, a new plan has been finalised by the government proposing a levy of user charges on road users to enable efficient operation & maintenance of roads, till perpetuity.

Road users are now faced with multiple charge burdens without much improvement in the quality of road or a reduction in travel time. Motorists face delays extending up to several hours, congestion and long stoppages at most toll plazas.

According to a study by IIM Kolkata and Transport Corporation of India, delays at toll booths cause losses of around Rs 870 billion a year while toll collections amounted Rs 43.64 billion in 2009-10. A vehicle on an average takes around 65 hours to traverse the distance of nearly 1,400 km between Delhi and Mumbai. On this route, of the three hours of stoppage delays, the time spent at toll plazas is around 2.5 hours. The delays are even higher on the Delhi-Bengaluru corridor.

This again raises the question, which “road” should India take to make the tolling system efficient?

Unlike in the case of Robert Frost’s poem–The road not taken, where just two roads diverged in the woods—we are standing at a juncture where there are many roads each of which has its own share of freeways and speed-breakers. India needs to look at what other countries have done in the past to learn from them.

Global trends

Most countries have to rely on general taxation, or vehicle and fuel tax for financing their road infrastructure while tolled network typically comprises less than 5% of the road network. Often, drivers have the option

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