New Delhi, Aug. 17: The Union cabinet today approved the road transport ministry’s operation-maintenance-tolling (OMT) policy that seeks to involve private players in road maintenance.
Under the new policy, roads being maintained by state agencies like the public works departments or central agencies like the National Highways Authority of India or the central public works department can be contracted to private firms for four to nine years.
Any firm that bags an OMT contract for a particular stretch of road will be responsible for collection of toll across it. Part of the proceeds will be used to maintain the stretch and the remainder will have to be handed over to the government.
“Since no capital has been spent on construction of the road, the firm has to return a certain amount to the government at the end of the agreement period,” a transport ministry official said.
This process is called “negative bidding”, the official added. “The firm that promises to return the maximum amount to the government at the end of agreement period will be selected. This will be the premium the government will earn.”
Another official said although the new policy guaranteed smoother roads, it also implied that toll collection would continue unchanged.
“The current policy is that once the investment is recovered, toll is slashed to 40 per cent. But since the project will now be handed to private firms, tolling cannot be stopped or even reduced,” he said.
The ministry, however, claimed that investment for none of the big projects has been recovered yet.
Even in the absence of a clear policy, the National Highways Authority of India has been giving out OMT contracts. Last year, it handed out six contracts for 963km of the 3,300km-long East-West Corridor that runs from Silchar in Assam to Porbandar in Gujarat.
“We have seen from experience that OMT contracts generate more revenue and are more successful,” said A.K. Upadhyay, the secretary of the road transport and highways ministry.
“Under OMT, the contractor will not just be doing maintenance work. He will have to upgrade all toll points by introducing radio frequency identification devices (RFID). He will also have to provide ambulances.”
Without a clear policy so far, the ministry would hand out toll collection contracts for short periods. The contractors would keep a part of the proceeds as collection fee. There would also be much squabbling and politicking over it.
India has close to 25,000km of highways. This financial year, OMT contracts will be given out for 4,500km of road. The process of identifying these stretches is underway.
Once the OMT system kicks in, most roads will come under private maintenance. At present, private firms working on projects on a build-operate-transfer basis have to maintain them for 15-20 years.