The Comptroller and Auditor General (CAG) has lashed out at the government for allowing Mumbai Entry Points Infrastructure Private Limited, Mumbai (MEPIPL) for continuing to collect one per cent cess
The Comptroller and Auditor General (CAG) has lashed out at the government for allowing Mumbai Entry Points Infrastructure Private Limited, Mumbai (MEPIPL) for continuing to collect one per cent cess on petrol and three per cent on diesel in Mumbai and neighbouring areas even after recovering the cost of construction of 37 flyovers in Greater Mumbai in November 2010, with the securitised amount of Rs 2,100 crore. The CAG has recommended the government to discontinue the fuel cess.
“The recovery of cess on petrol and diesel continued even after recovery of the cost of project by the company resulting in excess financial burden on the toll-paying public. We therefore recommend that the GoM may consider discontinuation of the fuel cess as the entire project cost stood recovered in November 2010 itself with the upfront receipt of Rs 2,100 crore and the cess received by them,” the CAG said.
In order to de-congest vehicular traffic, the government of Maharashtra (GoM) assigned construction of the flyover projects in Mumbai to the Maharashtra State Road Development Corporation Limited on a build-operate-and-transfer basis in terms of a GR dated September 4, 1997 and August 22, 2002. The cost incurred on the projects was to be recovered through toll, advertising and fuel cess on the sale of petrol and diesel in Mumbai, Thane and Navi Mumbai Municipal Corporation areas, the CAG said.
The firm constructed 37 flyovers at a total cost of Rs 1,065.25 crore (excluding interest during construction of Rs 167.70 crore). It started toll collection at five Mumbai Entry Points (MEP) from 1999-2000 onwards through private contractors and had collected Rs 1,058.66 crore up to October 2010. The toll collections were in terms of GRs of June 1999 and August 2002 of GoM (state public works department). It also received, from the GoM, fuel cess levied at one per cent of the cost of petrol and three per cent of the cost of diesel in Mumbai and adjoining towns since January 22, 2000. They had received Rs 536.44 crore up to March 2011, the CAG added. MEPIPL, through the GoM, submitted a proposal (November 2008) to the Cabinet committee on infrastructure to recover Rs 2,100 crore by way of securitisation of toll rights on the MEP for the ostensible reasons of retiring outstanding borrowings of the company and cost of the proposed Peddar Road flyover and Sion-Panvel Highway.
The company awarded the contract for securitisation of toll rights for a period of 16 years from November 20, 2010 to November 19, 2026 to MEPIPL for an upfront receipt of Rs 2,100 crore. The agreement with MEPIPL was executed in November 2010 after due approvals by the GoM and receipt of the upfront amount. “We observed that taking into account the IRR at 16.12 per cent for the project cost, as approved by GoM on the company’s proposals, the entire project cost stood recovered in November 2010 itself with the securitised amount of Rs 2,100 crore and cess received, yet the company continues to receive the fuel cess from GoM,” it added.
