To fund its expressways, under-construction and on paper, UP govt to auction their toll rights

Govt wants private players to pay in advance the total toll.

Written by Maulshree Seth | Lucknow | Published: March 3, 2016 12:54 am
UP govt, Akhilesh govt, Akhilesh Yadav, expressway, UP expressway, expressway construction, toll rights, UP toll rights, toll rights auction, lucknow news File photo of Uttar Pradesh Chief Minister Akhilesh Yadav.

AIMING TO raise funds for completing the ongoing projects before Uttar Pradesh goes to polls in 2017, the Akhilesh Yadav government is preparing to auction toll rights to its under-construction 308-km Lucknow-Agra Expressway and for upcoming 348-km long “Samajwadi Poorvanchal Expressway” that would connect Lucknow to Ballia. The private players will have to pay in advance the entire amount for the toll period of 10 to 15 years.

With private players not showing any interest, the state government is constructing both these expressways from its own funds.

While the construction work on Lucknow-Agra expressway, at an estimated cost of Rs 14,000 crore, is underway, the Samajwadi Party government is now pushing hard to start the construction on Poorvanchal Expressway by August this year. Estimated to come up at a cost of Rs 18,000 crore, the Poorvanchal Expressway will also see government implementing its plan to simultaneously purchase land and start the construction work.

A budgetary provision of Rs 4,003 crore for Lucknow-Agra Expressway and Rs 1,500 crore for Poorvanchal Express has already been made. The state government is also planning to take Rs 1,500 crore loan from Housing and Urban Development Corporation (HUDCO) for Poorvanchal Expressway.
Since these budget provisions would not be enough, the government is desperately looking at options to to increase revenue and is thus planning to auction the toll rights for these expressways to private players for entire tenure of 10 to15 years. The government will ask private players to pay up the entire amount for the toll period in advance.

Sources informed that the idea is not new as National Highway Authority of India (NHAI) has also experimented with it in the recent past.

“We are hoping to raise about Rs 5,000 crore through the auctions if companies agree to pay the entire amount in advance. The rights would be auctioned through proper tender process,” said Navneet Sehgal, chief executive officer, Uttar Pradesh Expressway Industrial Development Authority.

Asked if companies would be interested in taking up the option considering that the Assembly polls are due early next year, Sehgal said, “We are hoping to complete construction of Lucknow-Agra Expressway before that, thus there should not be a problem.”

He said the same model will be implemented on Poorvanchal Expressway as well.

Despite the fund crunch, Chief Minister Akhilesh Yadav is speeding up the process to start the construction work on Poorvanchal Expressway. While the budget allocations for the project are yet to reach 10 districts, which fall under this expressway, the government has already directed all the District Magistrates to start the negotiation process with the farmers for acquiring land.

Speaking to The Indian Express, S Rajalingam, District Magistrate of Sultanpur said, “We have started the negotiations with the farmers. As soon as the budget reaches us, the acquisition process will start immediately.”

Out of about 350 villages that are expected to come under the project in 10 districts, maximum 50 villages will fall under Sultanpur district.

With the plan to start construction work on this expressway by August this year, the government will require at least Rs 2,000 crore to buy land for the project.

In an another attempt to speed up the process, government has also re-structured the Poorvanchal Expressway project from six packages to eight packages of average 45-km each. The move will help it start the work simultaneously on each of these packages.

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