Calcutta, Oct. 5: The Bengal government has taken the first tentative step towards levying toll on state highways, implicitly acknowledging that infrastructure needs cannot be ignored and user charges cannot be avoided.
The state government has decided to allow the West Bengal Highway Development Corporation (WBHDC) to borrow money from other government agencies to widen state highways after its plan to take the public-private partnership route failed because of lack of interest among private players.
The loans will be taken from the finance department, Hidco or the West Bengal Infrastructure Development Financial Corporation. The loans will be repaid by levying toll on particular stretches of state highways.
A senior government official said both decisions were important for two reasons. “First, it is a recognition that road infrastructure is important and the government is keen to augment it. Second, the toll route to recover investment shows the government is willing to levy user charges,” he said.
Borrowing was the only option for the government as the PPP model could not be undertaken because of the state’s hands-off land policy and a Planning Commission criterion that toll cannot be levied unless the width of the road is at least 10 metres.
The unavailability of land had led the government to plan to widen only some stretches. This means toll can be levied only on these stretches.
“Private companies did not show interest in investing money to develop short stretches of roads because they felt they would face trouble in recovering investment by levying toll tax on them,” a senior official said.
This prompted the WBHDC to prepare a fresh proposal to develop the stretches where land is available by taking loans from state government agencies to keep the borrowing cost low. The proposal also mentions that the loans have to be repaid through the collection of toll tax.
Sources said Mamata Banerjee gave the proposal the go-ahead when it was placed before her last month.
“This is the first time the chief minister has agreed to levy user charges. It is a clear shift from her earlier stand, where she had opposed levying user charges on water,” a government official said.
WBHDC officials said the toll amount would be much less than what would have been charged under PPP projects as the agencies would not look to make profit.
“Repaying the loan is the only target of levying the user charge,” the official said, adding the absence of profit motive was the reason Mamata gave the green signal.
Some finance department officials questioned the feasibility of recovering loans through imposition of toll tax on stretches. “Had it been effective, private players would have surely taken part in the project,” an official said.
Soon after the WBHDC proposal was approved, it took up a project for four-laning the SH13 between Dankuni and Mogra. In the first phase, work will start on the Dankuni-Chandernagore stretch, where land is available.
“The WBHDC has got a loan of Rs 700 crore from the finance department at 8 per cent interest a year. The four-laning of SH13 will require Rs 550 crore to Rs 600 crore. The work order for the first phase is likely to be issued soon,” a Writers’ official said.
In addition to the SH13 project, the WBHDC has also carried out a survey of other state highways to find out where widening is required immediately. The corporation has identified a few such stretches.
“All these stretches cannot be four-laned to 14 metres. But these could be widened to 10- metre-wide two-lane roads. This is important because toll can be levied only on a 10-metre-wide road,” an official said.
The WBHDC is set to hire agencies to prepare project reports for widening the stretches. Officials said the agency would also engage private operators to collect toll on the stretches that will be widened.
“We will develop the roads in such a way that they last at least 20 years. Toll will be collected throughout this period,” another official said.