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Old 20th December 2011, 12:10   #46
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Default Re: Charging Toll on under construction highways - Ethical?

Not sure where my post has disappeared to.

We need a bit more active local participation in setting up tolls. The MLA/MP is supposed to provide it, but we know how that works. This link gives a good example of what the locals can do.

http://www.thehindu.com/news/cities/...cle2706569.ece

- mods, please can you delete this as I couldnt find the earlier post 'awaiting approval' and added it again.

Last edited by dingolphie : 20th December 2011 at 12:14. Reason: duplicate
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Old 30th April 2012, 15:01   #47
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Default Re: Charging Toll on under construction highways - Ethical?

Good news?
?No toll on unfinished NHs? - Times Of India

Quote:
Private developers should not charge toll from commuters on under-construction six-lane national highways, Parliament's committee on estimates has said.
The panel, in its report, pointed to "disturbing instances" where toll was being collected on shoddy roads. The committee has suggested that the ministry review and revisit the rules on collection of toll so that it does not become an "instrument of malpractice and unjust profiteering by unscrupulous elements to harass general public".

Now whether this recommendation will be enforced or not, is another matter. But looks like things are moving in the correct direction.
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Old 30th April 2012, 17:18   #48
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Default Re: Charging Toll on under construction highways - Ethical?

^^ Yes, no idea if that recomendation will see light of day. Perfect example of this is along Bangalore- Chennai GQ strech, 6 laning is progressing and so is the toll rates going up.
However, as per the report the operator should stop collecting toll alltogether during construction phase since the road condition will be bad for the user due to deviations and poor surface. Not sure how that will be taken by construction lobby though.
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Old 10th May 2012, 08:13   #49
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Default Re: Charging Toll on under construction highways - Ethical?

Finally the Supreme Court of India interfered and has demanded an explanation on this issue.

More on this TOI link.
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Old 10th May 2012, 10:21   #50
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Default Re: Charging Toll on under construction highways - Ethical?

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Originally Posted by moralfibre View Post
Finally the Supreme Court of India interfered and has demanded an explanation on this issue.

More on this TOI link.

Good Decision.

Also, I remember reading in the NHAI website that the toll receipts suppose to have the distance the toll is charged, per km rate etc. I would be more than happy if they can look into this aspects too.
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Old 10th May 2012, 10:56   #51
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Default Re: Charging Toll on under construction highways - Ethical?

According to me Toll as a concept is unethical.

And charging it for a Highway which is not ready - well, lets say 'India shining'

cheers,
ac
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Old 10th May 2012, 13:03   #52
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Default Re: Charging Toll on under construction highways - Ethical?

The setting of toll for highways and role of PPP in developing roads needs to be examined in a more open manner.

The deputy chairman of the Planning commission is on record stating that any private concessionaire does not come under the ambit of the Right to Information Act.

This means that the operations of a private entity under the terms of the concession agreement and the concession agreement itself are free from public scrutiny.

This is unfortunate for two reasons, first, that the public is subject to various charges set by the private operator, which get revised periodically. For projects such as the NH8 Delhi-Gurgaon-Jaipur link and the DND Flyway in Noida, the hike in charges is linked to the Wholesale Price Index and the Consumer Price Index respectively.
No attempt is made to ascertain whether their margins are coming under pressure – unlikely since any rise in costs would be more than made up by the increase in traffic / advertisement revenues.
Secondly, that there is insufficient impetus on the efficiency of operations undertaken by the private operator. This is due to the fact that the measurement of performance as well as the placing of any penalties is the sole domain of the authority granting the concession, which in case of the NH8 project is NHAI.

The operating standards to which the private operator has to perform, if at all they exist, are unknown to the public and in absence of any regulator there can be no oversight on adherence to the same. This is demonstrated best by the toll plaza mess which can be seen at rush hours at the Gurgaon toll plaza on the NH8.

Some questions that need to be asked are – is the average time for processing of vehicles being tracked, what measures have been taken for implementing traffic controls like enforcing lane discipline, ensuring that the tag lanes only cater to tag holders, etc.

The private operator has many times put its hands up and said they are unable to fine any offenders due to lack of rules for the same. There is a clear need of some innovative methods to improve the efficiency with which vehicles are cleared from the toll plaza. These could be in form of staff with mobile ticket dispensers handing out clearance tokens to those waiting in line or even delaying those that do not have tags in tag lanes by 5 minutes by asking them to park in ‘sin bin’ slots.

We have seen that NHAI is the party benefitting from any PPP arrangement, by way of revenue share agreements / initial payment as well as the one setting rules and monitoring performance. That NHAI has been inefficient in both is a separate matter. There has also been criticism from private operators, notably DSC (that operates the NH8 link). There is thus a clear case for an independent regulator that can handle issues relating to NHAI and any private operators in a transparent yet effective manner.

There is a note of caution, however, as we have seen regulators in other industries, notably aviation (AERA) and power (DERC) bow to the ‘whims’ of private companies. AERA has granted the likes of DIAL with generous passenger fees and DERC has actually rewarded an inefficient operator to make up claimed losses with higher surcharges on consumers. From the moves of the regulators it seems that the adage of “Losses being socialized and profits being privatized” is holding true.

Since there is a lack of competition in such areas correct price discovery forms the core of what a regulator needs to evaluate. Thus any regulator in the Roads / highways space would need to closely scrutinize the concession agreements that have little by way of encouraging efficiency and more by way of assuring annuity revenues to private operators.

Encouraging open scrutiny by bringing these agreements into the public domain would be a good start.
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Old 11th May 2012, 01:17   #53
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Default Re: Charging Toll on under construction highways - Ethical?

Quote:
Originally Posted by mayjay View Post
This is unfortunate for two reasons, first, that the public is subject to various charges set by the private operator, which get revised periodically. For projects such as the NH8 Delhi-Gurgaon-Jaipur link and the DND Flyway in Noida, the hike in charges is linked to the Wholesale Price Index and the Consumer Price Index respectively.
No attempt is made to ascertain whether their margins are coming under pressure – unlikely since any rise in costs would be more than made up by the increase in traffic / advertisement revenues.
Secondly, that there is insufficient impetus on the efficiency of operations undertaken by the private operator. This is due to the fact that the measurement of performance as well as the placing of any penalties is the sole domain of the authority granting the concession, which in case of the NH8 project is NHAI.

The operating standards to which the private operator has to perform, if at all they exist, are unknown to the public and in absence of any regulator there can be no oversight on adherence to the same. This is demonstrated best by the toll plaza mess which can be seen at rush hours at the Gurgaon toll plaza on the NH8.

Some questions that need to be asked are – is the average time for processing of vehicles being tracked, what measures have been taken for implementing traffic controls like enforcing lane discipline, ensuring that the tag lanes only cater to tag holders, etc.

The private operator has many times put its hands up and said they are unable to fine any offenders due to lack of rules for the same. There is a clear need of some innovative methods to improve the efficiency with which vehicles are cleared from the toll plaza. These could be in form of staff with mobile ticket dispensers handing out clearance tokens to those waiting in line or even delaying those that do not have tags in tag lanes by 5 minutes by asking them to park in ‘sin bin’ slots.

We have seen that NHAI is the party benefitting from any PPP arrangement, by way of revenue share agreements / initial payment as well as the one setting rules and monitoring performance. That NHAI has been inefficient in both is a separate matter. There has also been criticism from private operators, notably DSC (that operates the NH8 link). There is thus a clear case for an independent regulator that can handle issues relating to NHAI and any private operators in a transparent yet effective manner.

There is a note of caution, however, as we have seen regulators in other industries, notably aviation (AERA) and power (DERC) bow to the ‘whims’ of private companies. AERA has granted the likes of DIAL with generous passenger fees and DERC has actually rewarded an inefficient operator to make up claimed losses with higher surcharges on consumers. From the moves of the regulators it seems that the adage of “Losses being socialized and profits being privatized” is holding true.

Since there is a lack of competition in such areas correct price discovery forms the core of what a regulator needs to evaluate. Thus any regulator in the Roads / highways space would need to closely scrutinize the concession agreements that have little by way of encouraging efficiency and more by way of assuring annuity revenues to private operators.

Encouraging open scrutiny by bringing these agreements into the public domain would be a good start.
While the situation at Gurgaon Toll is really sad and requires an immediate attention, I do not agree to some of the points you have mentioned -
1. Revision of charges is either part of the concession agreement or as approved by NHAI. It is not a question of just the costs being increased, it must have been part of their financial model while bidding which would also include traffic increase.
2. The average processing time at Gurgaon toll is quite low and the attendants there are quite quick. This is from a personal experience of regularly commuting through the toll.
3. The operator can not do much for lane enforcing or for enforcing tag discipline. They come under the purview of local traffic police. The operator had requested the power to impose fines which was denied. 'Sin bin' slots are practical here because of lack of authority.
4. A regulator might not be helpful here as although the concessions are monopolistic, there is a predefined pricing mechanism. An independent authority to monitor operations may however be helpful.
Also, AERA bowing to whims of private operators? This is totally incorrect and can't be farther away from the truth.
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Old 11th May 2012, 02:17   #54
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Default Re: Charging Toll on under construction highways - Ethical?

well, there are two sets of toll booth attendants at dg toll. there is a set that is lightening fast. and then there is a set that can actually appear to be unwilling to accept the money. this second set is mostly deployed in 'off peak hours'. also includes post 2100 hours when heavy vehicles pass. plain stats for one instance when i crossed the toll at 2230:

total distance between work and home: 46.8km.
total time taken: 55 mins.
time spent at toll, from moment of joining a queue ( 1.2km long): 22 minutes.

they ought to pay me for the fuel wasted.
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Old 12th May 2012, 00:13   #55
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Default Re: Charging Toll on under construction highways - Ethical?

Quote:
Originally Posted by jods View Post
While the situation at Gurgaon Toll is really sad and requires an immediate attention, I do not agree to some of the points you have mentioned -
1. Revision of charges is either part of the concession agreement or as approved by NHAI. It is not a question of just the costs being increased, it must have been part of their financial model while bidding which would also include traffic increase.
2. The average processing time at Gurgaon toll is quite low and the attendants there are quite quick. This is from a personal experience of regularly commuting through the toll.
3. The operator can not do much for lane enforcing or for enforcing tag discipline. They come under the purview of local traffic police. The operator had requested the power to impose fines which was denied. 'Sin bin' slots are practical here because of lack of authority.
4. A regulator might not be helpful here as although the concessions are monopolistic, there is a predefined pricing mechanism. An independent authority to monitor operations may however be helpful.
Also, AERA bowing to whims of private operators? This is totally incorrect and can't be farther away from the truth.
Thanks for your detailed response, but I must disagree with you on some key points.

1. Revision of charges is built into the concession agreement - agreed. However, it is widely known and even acknowledged by the Government of India that NHAI relied on an outdated traffic study for the NH8 Delhi Gurgaon project. The actual traffic was higher than projections from the start of operations. This put the private operator at an advantage. The concession agreement only allows for adjustment in the concession period in an insignificant way. This surely calls for greater transparency.

2. Average processing time starts from the time a car joins the queue until the time it clears the toll plaza, not the time it takes for the attendant to give you change. Experiencing this on a daily basis, I can safely say that the time taken is quite painful.

3. It is easy to say that certain things are not under the purview of the operator. No one likes to take responsibility after all. However, how about implementing measures like demarcating lanes for a longer distance using some semi-immovable barriers - This would at least prevent the hot-potch, rampant lane switching and multiple queuing for a single lane. Surely these things do not require change of law or taking over the powers of the traffic police.

4. Predefined pricing mechanisms are exactly why it is important to have an independent regulator and transparent agreements from the outset. The reality is that large amounts of money are at stake. Private operators are willing to go to any lengths to ensure profits. There has to be some check and balance which ensures this does not happen. Things like placement of Ambience mall entrance right next to the toll plaza - causing a traffic mess, do not happen just by accident.
Finally, AERA allowed for a 336% hike in lieu of a 774% hike asked for by DIAL. ADF and UDF have both been implemented. According to IATA, this makes that airport the most expensive in the world. Surely something does not compute here.
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Old 3rd September 2013, 09:21   #56
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Default Re: Charging Toll on under construction highways - Ethical?

Came across one more news related to this issue. NHAI has requested approval of Surface transport ministry for stopping toll collection where road work is lagging. However not sure if like many guidelines posted above this will see light of the day. The report even quotes an official who is concerned about developers ability to pay loan if toll collection is suspended.
Toll collection in delayed projects
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