A “Rolling Contract” for Road Development: Government

The government is considering offering a “rolling contract” for road development that will see toll collection end ahead of the contracted period if the investment and profit has been recovered, in order to blunt criticism that surfaced over Delhi-Noida-Direct (DND) flyway and Delhi-Gurgaon projects. 
Conversely, the contract period may be extended if the contractor, due to certain circumstances, is unable to recover expected dues. Though the proposal offers some succour to contractors, NHAI will reserve the right to take over the project to stem public opposition over “super profits”. 
The ministry had a detailed discussion on this model-variable build operate and transfer (V-BOT). 
Cases like that of DND and other highway projects where contractors are allowed to collect toll for years have prompted the government to explore this new public-private partnership (PPP) model for road construction. 
Cases like that of DND and other highway projects where contractors are allowed to collect toll for years have prompted the government to explore this new public-private partnership (PPP) model for road construction. 
There have been several instances of protests in states including Delhi, UP and Maharashtra against the existing practice. Even a parliamentary committee had pointed out this flaw while examining the contract period and total toll collection on the Delhi-Gurgaon Expressway. 
“The real-time toll collection in each project rolled out under V-BOT will be verified using the electronic toll collection data and other IT-enabled assessments, the parametes of which will be defined clearly,” said a ministry official. 
Under this model, the projects will be bid out on the basis of total cost (including construction, financing, operation and maintenance) for a defined contract period. The lowest bidder will get the project and will build, operate and collect toll. 
“If toll collection increases beyond the projection due to high traffic growth, the contractor will recover the cost before the quoted period and NHAI will terminate the contract. NHAI will then collect toll to recover the land cost. When that amount is recovered, toll will be slashed by 40%,” another official said. 
All such projects will compulsorily have 100% electronic toll collection, installation of automatic traffic count and classifier system, video image detection and other systems. 
The model has been conceptualised to address all the risk factors, another official said. 


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