No bidders for toll plazas on four new state highways

Karnataka Road Development Corporation Ltd (KRDCL), which has decided to collect user fee on 17 newly developed state highways, has not found takers for setting up toll plazas on four highways in the state.

Apprehending poor revenue collection, low profit margin, and opposition from locals, no contractor has shown interest in setting up toll plazas on four highways.

Officials said that the contractors feel that setting up plazas on these highways will not be financially viable, especially after investing on infrastructure and staff.

If it fails to get any response in the next few months, the Public Works Department (PWD) might drop toll collection on these roads. However, no decision has been taken.

KRDCL floated four tenders between December 2017 and August 2018, but not a single bidder has applied for the bid.

The state highways are — Tintini to Kalmala (74 km); Davangere to Birur (149 km); Gubbi to Yediyur (49 km); and Yediyur to Mandya (60 km).

KRDCL was expecting a total annual revenue of Rs 6.3 crore from Tintini-Kalmala; Rs 5.3 crore from Davangere-Birur; Rs 2.65 crore from Gubbi-Yediyur; and Rs 1.7 crore from Yediyur-Mandya. The sharable revenue (about 60%) would be much less than the amount quoted.

Left with little choice, KRDCL has decided to put the tendering process on these roads, on hold. It has sought its consultant/financial advisor — PricewaterhouseCoopers (PwC) to re-assess the revenue estimation. PwC has also been asked to conduct another traffic survey. Though KRDCL wrote to PwC two months ago, it has still not received a response from the accounting firm.

“Until we revisit the traffic data and explore the reasons why there has been no response, we will not float any fresh tenders,” said officials.

Around seven to eight contractors from across the country have participated in the e-tendering process of the remaining highways.

Commuters using the Ballari-Moka SH can heave a sigh of relief as KRDCL has shelved the idea of collecting toll on this highway. Officials said that there were no bidders for setting up a toll plaza on the highway.

KRDCL might drop toll collection on the Mundargi-Shelwadi SH also, as it received very low bids. Officials said that a final call whether or not to levy toll on this highway will be taken soon.

On March 17, 2017, the state Cabinet had taken the decision to levy toll on the 19 SHs (1,530 km). Owing to indecision over the Ballari-Moka and Mundargi-Shelwadi highways, KRDCL had decided to toll the remaining 17 highways. But now, it is faced with an impediment with four more highways.

The corporation, which has now initiated tender process for six more highways, hopes to get a good response.

All 19 highways were developed under the Karnataka State Highways Improvement Project (KSHIP), aided by the World Bank and KRDCL.

The Public Works Department (PWD) had spent Rs 3 crore per kilometre to develop these roads.