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When expressways take their toll

By Shobhana Subramanian
August 14, 2009 12:14 IST
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The daily number of cars and buses using the Bandra Worli Sea Link during the daytime is just about 27,000. A colleague recently confessed he'd hit a speed of 90 km on the Bandra Worli Sea Link one night. Of course there's very little traffic after 10 pm so that's not surprising, says Shobhana Subramanian

But what has taken MSRDC (Maharashtra State Road Development Corporation) by surprise is that, even during the day, traffic isn't really picking up.

Just about 27,000 cars and buses are using the bridge which is considerably less than 45,000-50,000, the numbers MSRDC had been budgeting for. And just about 40 per cent of the 27,000 do a round trip.

MSRDC can't really be blamed because, the world over, figuring out what kind/quantum of traffic will ply on any road or bridge, especially a new or greenfield link, is a tricky business.

In India given the heterogeneous mix of vehicles and not too much historical data to go by, it's even more difficult. Take the Delhi-Noida toll road. When it was first opened, the traffic came in at barely 15 per cent of the estimates and even now, after seven years, collections are between 80 and 85 per cent of the forecasts.

As for the Gurgaon expressway, the traffic far exceeded all projections. MSRDC hasn't done too badly though it has whittled down the initial target of 75,000 cars a day about half the 1.45 lakh vehicles that drive down the Mahim causeway. But even that's unlikely to be hit soon.

The reasons why not everyone is switching over from the Mahim route are many; around 20 per cent would not be going all the way to Worli in the first place, some would want to drop their children off at schools along the way, others would want to shop for something and so on.

In fact, when the Bombay-Pune Expressway was first opened many truckers were reluctant to use it, even though they were not paying for the toll, simply because they missed their favourite dhabas on the old route.

It's also true that the traffic estimates for the sea link were made quite a few years back after which a good many offices have shifted from the central business district to the western suburbs because rents had become simply unaffordable.

Also what seems to have happened is that with some of the traffic shifting to the sea link, commuters are already saving 15-20 minutes on the Mahim route. So apparently most people don't see an added benefit in using the sea link at a cost of Rs 50.

Typically, forecasters use two parameters vehicle operating cost (VOC) and time value to arrive at the toll for any road. A better road will leave the car in better shape. But for users, its the fuel alone which amounts to between 60 and 70 per cent of the VOC that matters; the savings on wear and tear don't immediately come to mind.

So users would have to be convinced that by using the sea link, they're saving a litre of petrol. As for time, it is no doubt an influencing factor but perhaps more when getting into work rather than when heading home and probably explains why, although the round trip costs Rs 75 (compared with Rs 50 for a one-way ticket), only 40 per cent opt for it.

Going by the daily average collections of just over Rs 16 lakh, not enough people seem to be convinced about the benefits of the sea link just yet.

That puts the toll agents, who have committed to pay MSRDC Rs 75 crore (Rs 750 million) in lieu of a years toll collections, in a bit of spot because they should be mopping up about Rs 20 lakh a day.

They could try out a lower toll because demand for toll roads is known to be price-elastic. Or they could opt for bucket pricing much like what is done at multiplexes. In other words, have different rates for different times of the day with the highest rate for the peak hours.

It's important that revenues are maximised because most infrastructure projects are partly supported by the government through what is called a viability gap funding component.

In other words, its taxpayers' money that is being used. So if the concessionaires can't recover their costs from the toll collections, they will simply ask the government for more support.

It's also not uncommon for companies to agree to a certain amount initially and then ask the government for a bailout if things don't turn out the way they anticipated.

As it is, projects in this country are delayed and, therefore, cost far more than initially estimated. It would be a pity if we don't make the best use of what we've built.

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Shobhana Subramanian
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