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Incorrigible expressway firm

gurgaon Updated: Sep 06, 2013 01:46 IST
Siddhartha Rai
Siddhartha Rai
Hindustan Times
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There’s much hue and cry nowadays about the alleged inefficiency of the concessionaire in operating the Delhi-Gurgaon Expressway, but the Comptroller and Auditor General (CAG) and a parliamentary committee had two years ago slammed the firm, and pulled up the Centre and its highways body for “favouring” it.

According to the CAG’s performance audit of the expressway and the concessionaire’s functioning that was presented to the Lok Sabha and the Rajya Sabha in December, 2009, the National Highways Authority of India (NHAI) and the government of India (GoI) worked in a callous way that led to the “unjustified enrichment of the concessionaire”.

“There are so many violations that the concessionaire has been doing but unfortunately nothing has happened so far. The concessionaire recovered its investment in the very first year of operating the highway in January, 2008. This had been mentioned in the CAG report as well,” said JP Singh, president of NH--8 Highway Welfare Association.

The Sirhaul toll plaza near Ambience Mall on the Delhi-Gurgaon expressway witnesses heavy traffic jams during peak office hours. Sanjeev Verma/ HT photo

Based on the CAG’s audit of the expressway just 20 months after it started commercial operation, a parliamentary committee noted gross irregularities in the entire process through which DGSCL was granted the project and thus cast aspersions on the procedural fairness of the project.

The committee started with its doubts over the change of the mode of execution from one based on a special purpose vehicle (SPV) to the build-operate-transfer model despite it not being viable one. It went on to note that the preferred model had proved to be detrimental to people’s interests and had caused financial losses to the exchequer.

“The whole scenario gives an impression that the government was more interested in fulfilling the commercial interest of the concessionaire instead of serving public interest,” observed the committee. According to the report, NHAI and GoI flouted every norm in the book.

The committee also held RITES equally responsible for the expressway muddle as severe deficiencies were pointed out by the CAG in its detailed project report. It led to change in scope of work orders worth hundreds of crores of rupees.

“This reflects the lack of professional competence on the part of the NHAI in handling the project and points to a defective system of assessment prevailing in the organisation,” observed the committee.

The CAG report also noted that inadequate traffic surveys were used to fix the concession period, which, according to its own estimates, should have been just 14 years instead of 20.

“A logical fallout of this scenario would be that the concessionaire would gain R187 crore during the extended concession period,” said the parliamentary committee. In the first 20 months of operation, the concessionaire had collected R208 crore of the R555-crore that the project was worth.

One of the many other contentions of the CAG was that though this stretch was expected to be an extremely high-traffic corridor, “strangely, the toll rates were fixed on the basis of the worst-case scenario situation”.

The parliamentary committee also noted that “undue haste has been shown in giving the completion certificate to the concessionaire” and it expressed “strong reservation over the manner in which the completion certificate was issued”.

DGSCL was given the final completion certificate in August, 2009 despite the fact that it had not fulfilled the requisite conditions.

The Delhi-Gurgaon Expressway, the committee observed, had failed to serve the purpose for which it was conceived and executed — a social welfare measure — and the complicity of all agencies involved stands vindicated in the face of the huge public outcry against them.