FONRWA has been taken aback on learning that Noida Toll Bridge Company has decided to hike toll charges

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FONRWA has been taken aback on learning that Noida Toll Bridge Company has decided to hike toll charges in respect of cars from the existing Rs.25 to Rs.28 per entry. As is well-known to you, FONRWA had filed PIL in hon’ble Allahabad High Court in November, 2012, against the unjustified toll fee and have put forth our appeal for making DND toll free in view of the fact that the company has already earned double the amount than invested by them, by way of toll fee alone, in addition to income from other sources, such as, hoardings and rental income etc. In our PIL , we have also appealed to the hon’ble high court to dissuade the NTBC from hiking the toll charges in the meantime. Thus,the action of NTBCL relating to any hike until the case is pending in hon’ble High Court, amounts to contempt of court.

FONRWA , therefore, called an emergency meeting today, wherein the proposed hike was highly condemned. It was decided to organize agitational programme against the unjustified hike.
Our comments relating to the provision for toll fee revisions, are briefly given hereunder:;
(g) FEES:

(i) The concessionaire has been given the power to “determine, collect, retain and appropriate” the fee for use of the Noida Bridge in order to recover the total cost of the project and returns thereon. The fact that the concessionaire has the power to determine this fee is in contrast to the general practice in the case of National Highways and State Highways where (as per law) the power to determine user fees rests with the government – rather than being vested in a private entity.

(ii) The basic Fee Rate is adjusted to reflect consumer price inflation between the time of signing the agreement and the project commissioning date to arrive at the initial Fee Rate that is to be charged when the project is commissioned. The fee would be annually reviewed thereafter and revised in line with changes in CPI. Indexing of user charges is usually intended to avoid an unanticipated decline in real revenues net of costs. Since WPI is likely to reflect inflation in concessionaire costs more accurately than would CPI, it appears that indexing to WPI would have been more appropriate than CPI. Furthermore, the MCA for National Highways requires that user fees only be indexed to 40% of the inflation rate. The rational for this is that debt is fixed in nominal terms; hence the real value of debt repayments declines with inflation and there is no need to index the share of revenues allocated to debt repayment to inflation. Following this logic, it is not clear as to how it has been provided that the fee should always be adjusted to reflect the full change in the CPI.

(iii) FEE REVIEW COMMITTEE: Section 13.4 (page39) provides for establishment of Fee Review Committee for the purpose of determining any revision to the rate of Fee or revision of the formula for calculation of the Fee Rate submitted by the Concessionaire. It has also been provided in Section 13.5(f) that any decision reached by the Fee Review Committee shall be final and binding upon the parties. As such, Noida Authority is unable to stand in the way of any unreasonable upward revision in the Fee Rate, for protecting the Public Interest.

(iv) It has been provided that the Fee Revision Committee shall comprise of three persons; Noida Authority and the Concessionaire shall each appoint one representative. The third member shall be a duly qualified person appointed by the representatives appointed by Noida Authority and the Concessionaire respectively. In the event the representatives of Noida Authority and the Concessionaire are unable to agree on the third member, the person recommended by the Lenders shall be appointed. Surprisingly, Shri D.B. Lal, has been appointed as the third member of the Committee, right from the inception. As such, Noida Authority has all along remained helpless in having effective say in the Committee and stalling any unreasonable fee revision.

It IS SEEN FROM STATUS REPORT PREPARED BY US ..that NTBCL had already earned Rs.690 crores from toll alone, as against total project cost of Rs.408.16 crores incurred as on 3.3.2013. In addition, the company has earned substantial amount by way of hoardings and rents etc. Based on the above data, the estimated income of NTBCL, from toll alone, amounts to Rs. 860 crores, being more than double of the project cost.

Thus it may kindly be appreciated that NTBCL has been empowered to loot the public, in terms of the provisions of the concession agreement have been made totally in favour of the concessionaire.

Kindly publish the relevant details of the above important matter of great interest of general public, in your esteemed newspaper,

FEDERATION OF NOIDA RESIDENTS WELFARE ASSOCIATIONS (REGD.)

(N.P.SINGH) (A.N. DHAWAN (RAJENDRA SHUKLA)
PRESIDENT SENIOR VICE PRESIDENT SECRETARY GENERAL
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