Maharashtra govt notification states that there is a single toll booth at Vashi for the Sion-Panvel road and yet one fine day there is a new booth at Kamothe collecting money. Will this daylight robbery stop?
In Maharashtra (and possibly elsewhere in the country) toll continues to be collected from hapless commuters on all roads, highways and expressway, disregarding all rules and methods. One of the bizzare examples of the toll loot or daylight robbery is a second booth installed at Kamothe on the Sion-Panvel stretch on Mumbai Pune Expressway. The Vashi toll booth on the Expressway is meant to collect toll for the entire Sion-Panvel stretch and yet, there is another toll booth at Kamothe! This means travellers are forced to pay twice the toll for the same stretch of Expressway.
The notification issued by the Public Works Dept (PWD) of Maharashtra government on 27 September 2002 (see image below) clearly states that "toll shall be levied on classes of motor vehicles...passing through the section of Sion-Panvel Road (Yashwantrao Chavan Marg) including the bridge across Thane creek on this road in Mumbai, Thane and Raigad Districts, which is constructed, reconstructed, improved or repaired and also the flyover bridged constructed on such road and the approach roads thereto at the rates specified at the toll collection centre at Vashi on the said road."
Why is there a second toll booth on this stretch? And Who allowed the installation and toll collection at the second toll booth at Kamothe on the Sion-Panvel Road? This kind of loot cannot be done by the contractor without 'strong' political support at all levels.
Not only this, most of the regular commuters are kept in the dark about monthly pass or multiple entry pass for entering Mumbai from Dahisar, Airoli, Mulund, Thane and Vashi. The monthly pass is almost half compared with per day toll (for two trips) charged by the collectors. For example, all light commercial vehicles, are charged Rs30 per trip (applicable from 1 October 2011 till 30 September 2014). This means a vehicle making a round trip in a day would end up paying Rs60 a day (considering one entry and one exit) or Rs1,800 per month at Vashi toll booth on the Sion Panvel Highway. However, for the same route, the monthly pass costs just Rs1,000 while multiple entry pass costs Rs1,200. This toll will be hiked from 1st October to Rs35 (or Rs2,100 per month considering one entry and one exit @Rs70 per day), while the monthly pass would cost only Rs1,165 and multiple entry pass at Rs1,400.
Unfortunately, this information is not shared openly with regular commuters resulting in more toll collection for the booth operators.
Even the law that was supposed to govern (protect rights of commuters) the 'business' mentions two taxes in the same section.
Section 20 (1D) of Bombay Motor Vechicle Tax Act, 1958 clearly states that "Toll amount can not be collected more than Capital Outlay."
Section 20 1A (b) defines Capital Outlay which includes, work improvements, strengthening, widening, structural repairs, maintenance, management, operation, reasonable returns (not extraordinary) and interest.
For the Mumbai-Pune Expressway, Ideal Road Builders (IRB), whose promoters have strong political connections, is responsible for the safety, maintenance and operation as per the 15-year contract it entered in 2004. As per the statement of IRB, which it has sent to MSRDC, it had collected Rs949.45 crore up to September 2010. This must have gone up substantially consider the higher number of vehicle using the Expressway.
The IRB paid an advance of Rs918 crore at the time of the contract agreement in 2004, to be recovered by it through toll collection by March 2019 when the contract terminates. The amount of recovery would include not only its capital investment and interest on it (the Rs918 crore), but also expenses towards operation and maintenance of the e-way. Funnily, there is no total figure of how much it should recover to ensure that it does not make a loss and that it is assured profits, but IRB has been allowed to keep on collecting toll till the end of its contract, with a hike in the toll charges at a regular interval of three years.
The total absence of transparency in the toll collection system has time and again aroused suspicion and anger among commuters. In fact, people from across the country are still puzzled as to why toll charges on highways or expressways are increased all the time, especially when there is not much information available on the increase in number of vehicles using the road. There is hardly any authentic information on how much toll is collected annually by the private agency at each booth.
The Maharashtra State Road Development Corp Ltd (MSRDC) is responsible for monitoring the toll receipts; scrutinising claims of various toll collecting agencies and put for approval by competent authority; taking action against defaulters as per contract conditions; corresponding with regional offices regarding toll collection work and; giving replies under the Right to Information Act.
However, neither, the PWD nor the MSRDC readily share any information. This leads to commuters being robbed in broad daylight under the pretext of toll tax. Will somebody help the hapless commuters and stop the daylight robberies taking place at all toll booths in Maharashtra before people decide to express their 'feeling' through poll booths!
Despite several promises by state politicians to close toll booths, the 'business' continues to not only rob travellers but is also 'automatically' increasing the period for toll collection. Every now and then political parties indulge in violent protests against toll charges, allegedly more for political one-upmanship than sort out the issue that is burdening commuters.
A few days back, Ajit Pawar, deputy chief minister, whose party is in the power for past 15 years, asked people to vote for his party and after assuming power (again) he will close the toll collection at Kolhapur. This is 'fooling' citizens openly? Especially, when Mr Pawar is in power for the past 15 years, why he could not close the toll booth in Kolhapur despite a severe agitation from local people? But then, this is election time, and may be Mr Pawar is still under the impression that 'public memory does not last long'.
An interesting formula that helps to buy stocks when they are down
There is a variety of ways to make money from shares. But, over time, it has become clear that all successful investing is based on accepting one essential feature of the markets: it is impossible to know what will happen to the price of a stock in future. From this understanding flow multiple trading and investing strategies. One of them is buy-low, sell-high. While this is one of the most popular and oft-repeated investment maxims, how does one define what is ‘low’?
Luke Wiley suggests a simple formula. Look for stocks that have hit 52-week lows and judge them on four basic questions:
1. Do they have durable competitive advantage?
Is it the kind of company that is hard to compete with, either because it has cornered a difficult market or because competing with it would require an unreasonably high investment by others?
2. What is the purchase value of the company relative to its free cash flow?
If someone were to come in and buy the entire company, would the free cash flow being generated be well in excess of simply investing in a 10-year Treasury bond? After all, the cash flow on a 10-year Treasury bond is said to be ‘risk-free’ while the free cash flow from a company is not without risk.
3. What is the return on invested capital of the company?
Is the company using its money wisely to create returns below its cost of capital? It is using its money well to create returns, or is it taking on bad investments that don’t pay off.
4. Can it pay off its long-term debt quickly?
There are several companies that are making a lot of money, but should revenues stall or decelerate, could their long-term debt be paid off within a short period with free cash flow?
Wiley claims to have spent years refining the principles behind this—back-testing data and putting his own money on it; the results have been impressive. He asserts that his clients—those willing to take a slightly different approach to investing their requirement dollars—have never been happier.
The 52-week low formula is based on the idea that even the best companies go through problems when their stock value heads down. This leads you to investing in a good business trading at an attractive valuation. You are buying into a company that is out of favour with the investing public and Wall Street analysts.
Of course, you don’t just buy any company, trading close to its 52-week low. You have to always keep an eye on the first part of the investment approach: good quality business (that is temporarily out of favour with the market). The idea is to bet on something afflicted with a mild infection rather than a terminal disease.
Buying 52-week low strategy is a clever way to take two important steps while buying stocks: narrow down a wide universe of stocks and remove behavioural bias. “It narrows down the wide world of possibility when it comes to investing by starting with an end goal—outperforming the market, with less downside risk-and working backwards. It is a logic-based, disciplined approach to narrowing down the 3,000 publicly traded companies in the market to the 25 that represent the best opportunities for creating real value in the coming months,” writes Wiley.
More importantly, the 52-week low formula ensures that our behavioural basis is dealt with effectively. Far from buying stocks at their lows, we are attracted to stocks that are shooting up. Too much money is lost because investors herd behind what is popular, follow emotions, instead of the data. This can be eliminated only by a disciplined system of staying away from the ‘highs’ and looking for the ‘lows’ through an objective formula. Zeroing in on 52-week lows is a big help in that process.
I believe this facet of the approach (helping to deal with behavioural biases) makes it one of the best I have come across. There are lots of good approaches to buying stocks. Many cannot follow them because human beings, by nature, are not very rational. Successful investors train themselves to deal with their own biases. The 52-week low approach helps you remove your biases more easily. Definitely worth applying.