The grand Expressway robbery: How much toll is IRB allowed to collect and who monitors this?

From 1st April, those using the Pune-Mumbai Expressway will have to pay increased toll charges, which the IRB has been permitted to increase periodically. In the seven years since it took charge, the company has more than recovered the Rs918 crore it had invested initially, but it will continue to collect the toll for another eight years. So who decided this? And who is responsible to check the implementation?

While the toll charges for travelling on the Pune-Mumbai Expressway (now called Yashwantrao Chavan Expressway) will increase by from 1st April 18%, that is from Rs140 to Rs165 if you are travelling by car, the total absence of transparency in the toll collection system has again aroused suspicion and anger among commuters. In fact, people from across the country are puzzled as to why toll charges on highways/expressways are increased time and again and why they hardly ever have any authentic information on how much is the annual toll collection of the private agency who has been either awarded the contract on the basis of build-operate-transfer (BOT), or has been given the contract for operation and maintenance of the particular expressway or national highway after it is built.

In the case of the Pune-Mumbai Expressway, Ideal Road Builders (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, it has already 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. 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.

I used Section 4 of the Right to Information Act (RTI) between Friday, 25th March 2011 and Monday, 28th March 2011 to request for the inspection of files of the contract agreement between the Maharashtra State Road Development Corporation (MSRDC) and IRB, and I also asked for the year-wise data of the amount of toll collected from April 2004 to February 2011. I visited the MSRDC office in Pune for this.

As per the statement of IRB which it has sent to MSRDC, it has collected Rs949.45 crore up to September 2010. (See table for year-wise collection details.) But what about the authenticity of the toll figures supplied by IRB? Does MSRDC monitor the collections? The MSRDC officials threw their hands up saying that they were not responsible for this. However, I pointed out to them that this was in total contradiction to the information available on their website,, under 'duties and responsibilities of its toll monitoring unit' which states that MSRDC is responsible for: monitoring the toll receipts; scrutinizing 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.

toll collection -

Worse, as per the contract agreement which I procured during inspection of files on Monday, IRB has been provided with a chart for increment of toll charges, every three years, up to 2019, when its contract terminates. (In fact, MSRDC is to lease out operation and maintenance of the expressway up to 2030. Fresh tenders or renewal of IRB's contract will come up after 2019.) Hence, as per the chart that is a part of the contract document, a car owner who drives on the expressway will have to pay Rs195 between 1 April 2014 and 31 March 2017 and Rs230 from 1 April 2017 to 31st March 2020. (See chart, "Schedule of revision of toll rates on the Pune-Mumbai Expressway") Isn't this arbitrary? Could I see any reference document that allow for these increments? AP Abrol, executive engineer of MSRDC, Pune, explained, "IRB had taken a big risk in investing the initial Rs918 crore, as at that time the expressway was hardly patronised by people, and it almost seemed it would be deserted and MSRDC would incur huge losses. Hence, IRB was given the benefit of the risk factor.'' IRB keeps 100% revenue from the toll charges.

vinita - expressway - toll rates -

The ambiguity in the volume and period of toll collection not only for the expressway, but for several national highways across the length and breadth of the country, has led former senior police official SM Mushrif to seek legal intervention, after efforts to procure information under the RTI Act failed. The public interest litigation (PIL) filed by him in 2006 is pending before the Bombay High Court.

When Mr Mushrif asked through the RTI, about the rule under which toll collection is done, the MSRDC provided him a copy of a central government notification dated 5 May 2005 (issued by the Ministry of Shipping, Road Transport and Highways) that states: "As per Rule 3 of  the National Highways (collection of fees by any person for the use of section of national highways/permanent bridge/temporary bridge on National Highways) nothwithstanding anything contained in the Act'', the agency is "entitled to collect and retain fees at such rate, for services or benefits rendered by him as the central government may by notification in the official gazette, specify having regard to the expenditure involved in building, maintenance, management and operation of such national highway, interest on the capital invested, reasonable return, the volume of traffic and the period of such agreement.'' This rule applies to the highway departments of state governments too.

Similarly, Mr Mushrif stated that, "as per Rule 6 'verification of fee collection' sub-rule 1: it should be the responsibility of the person (the MSRDC in this case)…to strictly ensure that all fees leviable are levied, collected and correctly maintained. The person shall submit certified audited copies of the statements of fee collection at specified intervals as required under the notification for collection under sub-rule 2 of Rule 3. The auditor shall be appointed by the government. And as per sub-rule 2: The central government shall have the right to check the fee collection at any or at all times through their designated officers.''

Interestingly, the MSRDC has appointed an independent consultant for monitoring toll collection. However, the engineer of this consultancy company who was present while I was conducting inspection of files told me that, "We monitor everything else, like operation and maintenance, but do not look into the revenue from toll collection.'' Why? Government officials would not like to talk about this aspect, but it reveals favouritism towards this particular private agency.

A couple of months back, social reformer and activist Anna Hazare threatened to launch an agitation against illegal collection of toll. This was after a high-level committee of PWD chief engineers recommended that 31 out of 165 toll nakas in the state should be abolished as they were set up in blatant violation of norms prescribed by the Centre. Under pressure, the state government closed down 20 of them. For the record, Maharashtra has 165 toll nakas; 28 of which belong to the National Highways Authority of India; 61 belong to the MSRDC and 56 to the Public Works Department.

Vinita Deshmukh is a senior editor, author and convenor of Pune Metro Jagruti Abhiyaan. She can be reached at [email protected]

1 decade ago
hey vinita you are doing a great job.i have been commenting on the same issue on different wesites and forums but there is no result.please keep up the good work.....and the last thing i can say is tolls that have recovered the project cost must be shut down.and other thing the toll amount should be reduced every year instead of increasing it....kiti type cha tax bharaichaa aankhin...
Pravin M Dali
1 decade ago

I also obtained contract copy & other information on the basis of CAG,s report,
where in
1.satelite monitoring of traffic (Nos of
vehicles passing through)
2.Planting of tree alongwith both the
sides of EX Way
& other conditions are not followed by the contracor/MSRDC

3.There is loss of Rs.918/- cr to state by under esitmating of No of traffic & other estmates.

Pl see CAG,S available on website.
Make the agency to plant trees not the bushes as it is done at Pune Nasik High way.


Pravin M Dali.
1 decade ago
One way to limit the toll is to decide at teh time of initial contract the - the payback period, the amount to be collected every year & estimated no of vehicles using the toll road. This no. of vehicles should be used to estimate the amount of toll to be collected. So for eg. It was decided based on payback calculation that the toll period is 10 yrs & every year Rs 1Cr is needed & the units paying toll are 1L. So Toll will be Rs 10 per unit. At end of year, if Toll collected is Rs 1.5Cr, then next year, amount to be collected is only Rs 0.5Cr & no of units have increased to 1.25L. So Toll should be reduced to Rs 4. If units are less than Toll can increase. Idea should be the Total Toll collected per year is maintained constant. This will keep Toll rates reasonable & will not allow undue enrichment to the Toll contractor.
1 decade ago
it is realy a good job u people are doing by using RTI Act properly for a common cause.
1 decade ago
should keep on writing till the rules are tightened. making good roads at what cost? was there a transparent bidding process? you can dictate NPV analysis to a CA and he will certify . all of satyam and reliance books are certified! so much for NPV analysis and certifications. VGF and such rules have been created to provide a window of loot to the bidder. The mumbai pune route was always going to be profitable. one doesnt need to be einstien to get it. just like mahajan knew that 100cr indians need mobiles or one knows that delhi - agra , bangalore mysore etc are profitable . pawar , the biggest VC of india, needs to be dealt with. He has his hands everywher. the day law catches up with him, we'd know law exists in india!
Replied to citizenindia comment 1 decade ago
Your hope in the last sentence will remain a hope forever. Unfortunately for India, Pawar has reached a stage where he is untouchable.
1 decade ago
Please move on, moneylife has been chasing the same story since last 10 years. Please write some fresh stories.
sucheta Dalal
Replied to zubin comment 1 decade ago
Ha... this should prove that the writer is from IRB. Indeed, i have been writing about the Expressway for the past 10 years, but that includes my stint in the Indian Express.
Moneylife is just 5 years old.

As for IRB, i must mention that i have followed this beautiful expressway built by R C Sinha. Over the past few years, under IRB there is nothing but mismanagement. The fence that was built to allow high speed travel has broken in many places and never replaced.
There are buffaloes endangering traffic and people breaching the boundaries to cross the road. All this causes drivers to lose control and leads to accidents.
So what is IRB's solution? To extract another Rs 3000 crore for a bypass.
The lack of monitoring is outrageous. Hats off to Vinita for getting the numbers. We will continue writing even if it upsets you. No question of moving on.
Vinita Deshmukh
Replied to sucheta Dalal comment 1 decade ago
Zubin: Even after 10 years, the expressway is shoddily maintained with dangerously rising number of accidents. Now, the toll controversy. Hence, much more needs to be written about till the powers-that-be come out of their cosy cocoon from where they are fooling the public and making it pay without getting the basic services that is the right of every commuter. As long as the commuters face inconvenience and are made vulnerable to needless accidents, expressway should be written about as it has relevance in terms of news and vital public issue!
Replied to Vinita Deshmukh comment 1 decade ago
@vinita: Brilliant work to expose vested interests, networked extortion, shared loot and brazen bribery..real face of un-regulated P-P-P !
Keep up the good work..
Badri Narayan Baldawa
1 decade ago
These adhoc increases are without reasons except probably again a bribe to to some authority. Authority signing the increase should be grilled to justify, thus going to the root of the problems, which would mainly be corruption. These type of increases need to be protested till the increases are rolled back and matters should be investigated
1 decade ago
The author should do an objective IRR / FCFF / NPV analysis before coming out with such reports. If the author is unable to do such analysis, or get hold of such analysis, then the author must do the readers a favour, and refrain from subjecting them to the author's nonsensical reviews.
shamit shahani
Replied to Vivek comment 1 decade ago
This is a load of rubbish. This showpiece expressway is the only one to allow high speed travel.
The money is long recovered and IRB gets away with bleeding the people of Mumbai and Pune, because it has all the politicians in its pocket.
Where is the great Nitin Gadkari who wrote a book and claimed credit for the Expressway?
Will he justify increase in toll when IRB has already collected so much?
IF IRB has the honesty, let it introduce smart cards to allow quick movement and better monitoring of the money it makes.
And let that money go to its shareholders.
Dont fool people just because you manage to collect awards in return for sponsorships to television channels.
Vinita Deshmukh
Replied to shamit shahani comment 1 decade ago
Documents procured through RTI show that MSRDC has deliberately looked the other side for seven long years, allowing the IRB to take toll from people without providing proper report card to MSRDC and the latter in turn has not touched the issue of monitoring and auditing toll collection figures. Hence, this issue all about facts than `nonsensical reviews' and such facts do make some people uncomfortable
Shadi Katyal
1 decade ago
We have lived with the poorest roads but since those were freeways and damaged only our cars, we didn't complain. Now when we have got a private enterprise who is running these roads and asking for Toll we have nothing but complaints.
Are the roads not properly maintained and off course in order to expand the company will need funds and with inflation in the nation,why cant private toll roads ask for more fee????
We need better roads and must calculate the cost of repaing cars or paying few more rupees as toll.
Prem Bajaj
Replied to Shadi Katyal comment 1 decade ago
As a matter of fact, IRB did not build the road, but instead took the risk much later - after completion and after witnessing the potential of increased traffic. While a toll collector has due right to earn returns on funds invested, and for duties performed - there cannot be an arbitrary value attached to same. In fact the condition of the expressway has not improved in any manner to claim additional charges of upto 18% (or every 3 years). Just by painting lane markers is not any reason to claim upkeep. besides as an infrastructure project - expected returns are calculated over a minimum life of 20-25 years in public interest. As I learn, the entire capital funds are already collected - so where is the ammortisation schedule......thats one way to know how the returns are calculated, over what period of time requiring frequent toll increases, and how was the income stream earned distributed on its books..
subramaniam s
Replied to Shadi Katyal comment 1 decade ago
Sir, I suggest you check facts. IRB did not build this fantastic road. It was a guy called R C Sinha. I read about him right here in a section called pathbreakers. An amazing man with great achievement.
IRB is only extorting money and bribing politicians. You please read about Sinha and dont wrongly give credit to someone else. A google search of this site would help.
Atul Kumthekar
1 decade ago
Anna Hazare may not be too wrong.
Narendra Doshi
1 decade ago
It is well known (Courtsey Moneylife's previous research articles when its share price was manipulated over almost one year) that IRB is a politically very well backed company. One should not hence get surprised at the outcome of the RTI facts. All the same, THIS is not what should continue for the future, endlessly.
Also, we had several murder, loot cases especially of IT employees on the same highway. Does this also form part of operation & maintenance or NOT? Whether ANY sort of COMPENSATION has come to the individuals or their families is not known ?
A brilliant exposure by Vinita .
H V Kumar
1 decade ago
Only public activism and transparency can help contain this loot by private contractors running toll roads and charging extortionist tolls under the garb of anti-public interest government policies. regardless of capital cost recovery and actual costs of operation. How can public infrastructure be priced through a tendering method where Govt makes maximum profits and not the other way round - public pays least costs? Why is there no toll tariff regulatory commission? Why are the MSRDC toll regimes so different from the NHAI ones? What should the public do to fight just extortion?
Babubhai Vaghela Ahmedabad 9427608632
1 decade ago
Following may answer the query as Gazette Notification of 1997 that allowed Toll Tax on Perpetuity basis is removed. Please upload on Ministry of Road Transport & Highways Website - Removal of Perpetuity Clause - Extraordinary Gazette Notification Part II - Section 3 - Sub-Section (I) dated 12th January 2011..
1 decade ago
its a great highway robbery by these people & most interesting part is government is supporting this kind of robberyyyyyyyyyyy
1 decade ago
This is regards to widening of Pune-Satara highway from 4 lanes to 6 lanes along with service lanes. I understand the budget for this is Rs.1600 Cr. The contract has been awarded to Reliance Infrastructure.
Even before starting the work, which should have commenced by June 2010 the tolls have increased and another increase is expected by April 1st 2011.
Till date no work on this entire stretch has started.
Also, just by adding just 2 lanes for 110 kms, how did the budget of Rs. 1600 cr was arrived, when entire 6 lane Mumbai-Pune expressway in concrete was built with a budget of Rs. 800 cr.
Reliance has always been known to be corrupt and they have zero experience in building highways, how was this contract even awarded to them?
Dear Vinita madam, this is a major issue than the Pune-Mumbai expressway, hope you look into it and investigate the matter as it is under implementation and results can be beneficial to everyone.
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