Here Charitable Individualism is the key!… nothing less.


My father, my grand father have surely paid for the National Highways by paying their taxes. Thus many National Highways were expanded, maintained and some new ones constructed out of their taxes! To LOOT the third generation for maintaining these OLD HIGHWAYS, is usurious.

When one traverses three segments of National Highways connecting Bangalore to Chennai, which are NH 46, NH 84 and NH 7, one feels that these Highways were infrastructure built through generations of activity. Activity of Indians paying their taxes, the Government acquiring land to expand those Highways and maintaining them out of these revenue receipts.

But somewhere along the line, we INDIANS are taken for a ride. The three NHs of 7, 46 and 84 consisting of around 280 Kilometres are divided between toll operators who are located at Krishnagiri, outskirts of Vaniyambadi, outskirts of Vellore, near Wallajahpet and finally at Sriperumbudur. These are the TOLL joints as one travels from Bangalore to Chennai. From Hosur to Krishnagiri is NH 7, then from Krishnagiri to outskirts of Ranipettai (near the Wallajapet toll) is NH46 and the last stretch from Wallajahpet to Chennai (Vanagaram) is NH 84.

These 280kms have been split up between these 5 toll operators. These Highways were built, rather renovated, on a BOT basis. They were to collect the toll upon completion of renovation and recover their cost.

From the 6th or 7th of June 2011, the rates of two tolls have been revised from Rs. 25 to Rs 60 and the other from Rs 35 to Rs 60. Each of these tolls collect tolls for usage of around 50 Kms. Which means per KM cost of using these tolls are Rs 1.20 per KM. Motorbikes, autorickshaws and ambulances are exempted. Which means only passenger cars, trucks, LCVs and other Heavy vehicles are tolled!

These roads were NOT acquired recently, they were existing roads which were through a bidding process allotted for laying and collection of tolls. These collections are not necessarily done by the companies which LAID THE ROADS. These companies which laid the roads have probably exited after selling their stake to another company, working out the REVENUE generatable from toll operations in the remainder of the years. This sudden revision of the toll rates took me by surprise. When asked, who were the toll operators one of the persons manning the Krishnagiri Toll said that RELIANCE Industries were operating the toll.

I see that these NATIONAL HIGHWAYS for which lands were acquired way back in the 50’s and 60’s are being handed over to these cash rich, well connected companies and allowed to LOOT from the helpless travelers. On the one hand it is the avowed policy of all the parties in power, therefore the Government of India, to create infrastructure facilities for free interaction and exchange of goods. Yet this LOOTING of passengers, who travel by cars is PREPOSTEROUS.

My fore fathers paid for the roads and now I pay for these fat cat companies, in the guise of maintenance! And these are limited to the NH in Tamil Nadu and Gujarat and Maharashtra where the traffic is enormous because of manufacturing and other trading activities. Whereas even though there are similar roads in other parts of the country they do not generate this level of income.

By usage of my car if the roads are eroded to the extent of Rs1.20 per KM, then the justification should be transparantly explained by mentioning the toll collections for the year, maintenance charges, salaries and other expenses and the profits made from these operations. Further, as these companies are prone to inflating their expenses on BOOKS and thereby showing REDUCED profits, their books should be audited by the CAG, as these are toll collectors who are stepping in to do the functions of the Government.

Sure PPP is an instrument of growth, but using that as a means to EXPLOIT succeeding generations is DESPICABLE to say the least! I hope the government would be rational in their toll collection in high activity states like Tamil Nadu and not use these for netting off the losses incurred in toll operations in sluggish, uneducated and feudal states of India.

It has been recently reported in the papers that in NH47 between Aroor and Edappally near Cochin-Ernakulam, there was a toll collection of Rs5, which was revised to Rs 15/-. The locals went to the toll plaza and got it vandalized.

Another instance is the Bangalore International Airport Ltd., who have taken objection to NH7 collecting toll from the taxi operators.

There is a Private Limited company called MEPL, who collect @ 45% of all toll collected in this country. Any effort to find out the persons behind this Private Limited Company from the Indian websites is in vain. One has to rely on REUTERS for dope on their activities. One can access this from the following link:

Such is our transparency. The article is posted by me as a comment to this blog! As it is not uncommon for such articles to disappear, when found inconvenient by the Pvt. Ltd Company!

Finally, toll collected is a FEE and not a TAX. Only to the extent that the users have enjoyed “COLLECTIVELY” that the FEE is to be charged. But there seems to be an UNDUE HASTE by the Government to PULL OUT MONEY from the road users more like a TAX than as a FEE!


Comments on: "The TOLL LOOT!" (6)

  1. The hike in toll rates are the main reason for hike in prices of consumer goods….. The poor man is extra burdened by this system. Atleast you have touched this issue by posting in your blog, What do we call those people who simply pay the toll and move off illiterates or people with lack of awareness. I never knew that the revenue generated by collecting toll is being enjoyed by big fishes.


  2. movid said:

    FITCH rates MEP Toll Road’s bank loans ‘BBB-(ind)’; outlook stable
    Thu May 19, 2011 9:29pm EDT
    (The following was released by the rating agency)
    May 19 (Fitch) Fitch Ratings has assigned India’s MEP Toll Road Private Limited’s (MEPL) INR327.2m bank loans a National Long-Term rating of ‘BBB-(ind)’ and its INR1,750m bank guarantee facility a rating of ‘BB(ind)’. The Outlooks are Stable.

    MEPL is a subsidiary of Ideal Toll and Infrastructure Private Limited (ITIPL). It was established as a special purpose vehicle (SPV) on 8 August 2002 to undertake toll collections at five entry points to Mumbai for a period of 156 weeks (three years). In 2010, the toll collection rights were transferred to MEP Infrastructure Private Limited, a subsidiary of MEPL, for a period of 16 years on the payment of an upfront fee of INR21,000m. MEPL currently holds 22 concessions: 17 from National Highways Authority of India (NHAI, ‘AAA(ind)’/Stable), four from Maharashtra State Roads Development Corporation limited (MSRDC) and one from the Road Infrastructure Development Company of Rajasthan (RIDCOR), in exchange for fixed weekly payments to the concession granting authority during the concession period. MEPL continues to bid for toll collection rights on various NHAI and State Highways Authority concessions.

    As described more fully below, for each concession, MEPL takes the revenue risk while paying NHAI a fixed weekly amount in exchange for the right to collect tolls. MEPL must provide an upfront cash deposit and a bank guarantee, each equal to four weeks worth of fixed payments to the grantor – together serving as performance security for c. two months of fixed payments. This performance security is retained by NHAI with no interest payable for the duration of the concession, following which it is released back to MEPL. For 12 of the 17 NHAI concessions, the cash portion of the performance security has been funded by the INR327.2m bank loan; for the remaining 10 concessions, it has been funded out of internal accruals, which could later be replaced by debt. The bank guarantee has been drawn for all 22 concessions from two banks which have sanctioned limits of INR1,750m collectively, of which INR560m has been drawn so far.

    MEPL’s bank loan ratings have many of the features of a project finance structure. Revenues from 12 NHAI concessions are deposited directly into an escrow account, from which fixed weekly payments are made to NHAI as part of the prescribed cash waterfall. There is a minimum interest cover ratio covenant of 1.40x and a three-month debt service reserve account. Interest on the bank loan is payable monthly at an annual rate of 10.2% and principal repayment is set to take place immediately upon NHAI releasing the performance security. A six-month cushion has been built in to allow for some delays so that the final repayment date is 18 months from the date of drawdown. As per Fitch’s analysis, MEPL’s revenues are adequate to service interest payments (ICR c.3.8x), thus leaving some surplus and not requiring the grantor to draw on the performance security – which would in turn allow the unimpaired repayment of the principal.

    The bank guarantee does not have the same features, which is reflected in its ‘BB’ rating. Limits of INR1,750m have been sanctioned to enable MEPL to continue bidding for additional concessions. While Fitch has analysed the projected revenues and costs of nine of the additional concessions (five from NHAI, four from MSRDC), most of these roads have recently been handed over to MEPL, so track record of revenues is relatively limited. Furthermore, as long as MEPL continues to bid for new concessions, future rating actions will depend on the revenue capacities of the new roads.

    For both the bank loan and the guarantee, MEPL benefits from the diversification of revenue risk across various geographies within India (the concessions are spread over seven states) and from the resulting cross-collateralisation, where revenues from one concession can go towards the payment of fixed obligations of another, expect for the 12 NHAI bank-loan concessions that cannot cross-collateralise the others. However, it should be noted thatalthough the roads are all operating toll roads, data available to Fitch including internal traffic counts carried out by MEPL has a limited time scope and therefore estimates of future revenue could be subject to intra-month and seasonal variations. This results in additional uncertainty regarding MEPL’s performance and the same is reflected in the ratings.


  3. Sir,
    That is not Walajabad, That is Walajapet


  4. movid said:

    Well, for some reason, the toll rates have been reduced from Rs. 60/-each to Rs. 25 and Rs 35/-. So there must have been a writ filed in the courts and the courts would have issued an order. I do not trust these Private limited companies would reduce/rollback on their own.
    I sometimes wonder if the toll user fee for these 2 sectors were raised just to test waters!
    Now we are collecting for their education a cess, for which funds were liberally allocated in the 59’s, 60’s and 70’s and yet the school buildings and teachers are missing still!
    Likewise, we collect road tax for 15 years in advance, and the states do not provide roads!
    Let us be careful when we pay FEES, eventhough we cannot do much about TAXES. But let uis not allow our governments which we vote for upholding our constitution into tricking us into paying TAXES in the guise of FEES!!


  5. movid said:

    The toll looting is back. They have revised the FEES and we like sheep are silently following the LOOTERS unawares! Has anyone bothered to explain? No. The courts and the litigant are satisfied!!
    What is the PRINCIPLE? Fee or TAX?


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