Mumbai-Pune Expressway: Activists File Complaint with ACB against MSRDC's MD, PWD's Principal Secretary for Floating 'Illegal' Tender for Toll Collection till 2030
Moneylife Digital Team 12 November 2020
Two activists working on the issue of toll loot on highways have filed a complaint with the anti-corruption bureau (ACB) against top executives of Maharashtra State Road Development Corporation (MSRDC) and public works department (PWD) for what they call 'illegally floating a tender for toll till 2030 on the Mumbai-Pune Expressway (MPEW - now called Yashwantrao Chavan Expressway)' that caused a loss of around Rs231 crore to the government. They claim the loss is caused due to charging a 0.2% stamp duty on sub-concession agreement valued at Rs8,262 crore instead of 3% on the value of the instrument. As per an order from the Bombay High Court, stamp duty payable should have been charged at 3% of Rs8,262 or about Rs247.86 crore. However, they paid just Rs16.52 crore at a rate of 0.2% causing a loss of about Rs231 crore to the exchequer.
 
In their complaint, Mumbai-based Advocate Pravin Wategaonkar, and Pune-based Sanjay Shirodkar allege, "Earlier, the state government as well as MSRDC in their compliance report to the public enterprises committee (PEC) admitted that the project cost for the Expressway would be recovered by 2022 and thereafter toll collection will have to be stopped as per an order issued by the Bombay High Court (HC). In violation of the directive from cabinet infrastructure committee (CIC) and without taking permission from the HC or disclosing recoverable project cost as of August 2019, Radhyeshyam Mopalwar, Managing Director of MSRDC and Manoj Saunik, principal secretary of PWD, undertook tender process for the period August 2019 to April 2030."
 
"On 20 June 2019, Mr Mopalwar sought permission from Mr Saunik to undertake the tender process for 10 years and two months. On 1 August 2019, the PWD granted permission for the said project. In response to a query filed under the Right to Information (RTI) Act, the planning department stated that no CIC meeting was held between 20 June 20 and 1 August 2019.
 
"Further, the planning dept stated that an administrative dept cannot vary or improve or take a different decision than the one directed by CIC. Neither the MSRDC nor the PWD have disclosed the balance recoverable cost of the Expressway to the competent authority or CIC for post tender approval while finalising toll contract for a period of more than three years. As per the Motor Vehicle Tax Act, toll can be levied only to recover balance recoverable project cost," the complaint says.
 
 
Mr Mopalwar, however, has refuted the allegations in the complaint filed by the activists. Speaking with Lokmat newspaper, he says, " For the Expressway project, MSRDC has concession till April 2030 and is legally entitled to recover the cost through toll till that period by floating a tender."
 
The Bombay High Court in an earlier case involving MSRDC, IRB as well as the collector of stamps has considered toll contracts as 'lease’ with stamp duty chargeable at 3% of the value of the instrument. 
 
"Mr Mopalwar, representative of IRB and the collector of stamps conspired to make valuable security being toll collection contract and paid 0.2% stamp duty on sub-concession agreement value of Rs8,262 crore for toll collection rights till 2030 causing a wrongful loss of Rs231 crore to the government. These acts of commission and omission of Mr Mopalwar, Mr Saunik and others attract various offences under the Indian Penal Code (IPC) and the Prevention of Corruption Act," stated Adv Wategaonkar and Shirodkar in their complaint to the ACB.
 
As per the complaint filed with the ACB, the activists pointed out that in its meeting on 20 December 2018, the cabinet infrastructure committee (CIC) directed both the PWD and the MSRDC to first take permission of the High Court as per the judgement in the public interest litigation (PIL 38/2017) before appointing a contractor for a period of more than three years for toll collection on the MPEW. The PIL has been filed by Adv Wategaonkar and Mr Shirodkar along with Vivek Velankar and Shrinivas Ghanekar and focuses on excess toll revenue collected for the earlier 15-year contract for the period 2004-2019.
 
In June this year, Ideal Road Builders (IRB), which had won the toll operation and maintenance contract for the Expressway when bids opened in February, handed over a cheque of Rs6,500 crore to MSRDC as advance payment. For the next two years, IRB would pay Rs850 crore per year and then Rs62 crore during the fourth year as part of the contract. 
 
 
The contract includes the new expressway as well as the old Mumbai-Pune highway, taking the total length of roadway for maintenance to 205.4km.
 
IRB had managed the same project for 15 years till their concession period ended in August 2019. 
 
For the Mumbai-Pune Expressway, IRB was awarded the contract of operation, maintenance and toll collection of the e-way (and NH-IV) for the period between 2004 and 2019. Between April 2004 and September 2010, the company collected Rs949.45 crore by way of toll. 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. 
 
Comments
goplaces2015
5 months ago
Huge amounts of cash collections running into almost Thousand Crores will surely attract the dishonest and corrupt. Which is also exactly why the newly introduced and potentially efficient ETC/ FastTag processes are allegedly being undermined by the same toll agencies by causing issues with the Readers and causing time delays and traffic jams at the Gates ! Also large number of wrong debits and disputes are raised (I am a victim of this) so that Fast Tag users are discouraged from continuing and new users signing up too! Otherwise why are Fast Tag lanes so smooth world over and even in many parts of India but not in States like Maharashtra ? Even if few vehicles don't have a balance , why can't they be let through without halting them , and blocking everyone, and they could be penalised / debited subsequently ? After all camera proof is available at toll nakas?
Ramesh Popat
1 year ago
toll taking big toll ! toll everywhere looting anyway ! who will stop it?
kpushkar
1 year ago
Is it not obvious who is the beneficiary for the cash toll revenue here?
The political opponents would be sleeping together behind curtains, we may not know it
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