HYDERABAD: A public interest litigation filed before the Telangana High Court said the state government (municipal administration and urban development department, MA&UD) and the HMDA had hidden the initial estimated concessional value (IECV) for the tolling, operation and maintenance of the Outer Ring Road in contravention of NHAI rules.
The concession agreement in the toll, operate and transfer (TOT) mode for 30 years was signed on May 28, 2023, with the bidder IRB Golconda Expressway Ltd, after the bid amount of ₹ 7,380 croreS was realised.
IRB Infrastructure Developers Ltd created the special purpose vehicle (SPV) IRB Golconda Expressway Ltd, with which the ORR deal was struck.
The PIL objected to the claim of the government and the HMDA that the NHAI's asset monetisation policy (AMP) had stated that the IECV could not be disclosed. The petitioner told the court that changes in the AMP (circular dated 13.12.2019 and memorandum dated 22.09.2020), only prevented the disclosure of IECV during the request for proposal (RFP) stage and before the process for the TOT bidding.
The AMP clearly mentioned that the IECV should be disclosed after the receipt of technical bids and after declaring the selected bidder, the petitioner stated.
Gadeela Raghuveer Reddy, a social activist from Kondapaka of Siddipet district, who filed the PIL said that in case the ORR concession had been undervalued, it would be detrimental to the interests of the state and its people.
Apprehending that the ORR may have been undervalued, leading to a loss of thousands of crores, the petitioner requested the court to direct the Comptroller and Auditor General ( CAG) of India to check the veracity of the claims on IECV by the government and HMDA. He requested the court to declare the concession agreement as illegal, in the event the CAG found that the asset was undervalued.
The IECV is an important benchmark that would been arrived at using relevant factors such as discount rate, estimated cash flow etc. for the contract period. It would stand as a benchmark to evaluate the project's minimum worth. The disclosure of IECV would prevent the undervaluation of the project and prevent a loss to the public exchequer, he said.
In the context of TOT auctions conducted by the NHAI, IECV refers to the base price or reserve price set by NHAI for the concessionaire to operate and collect tolls on the selected highway stretches for a specific period.
The user fee (toll) revenue of ORR for 2022-23 was'542 crore, and for the subsequent financial year 2024-25 it was estimated at '689 crores.
The average daily toll revenue of the ORR is between '1.2 crore and '1.4 crore. The offer by the concessionaire would amount to just '67 lakh per day for the next 30 years.
At the same point, the 94-km, six-lane Mumbai-Pune Expressway, having six toll gates, was been awarded by the Maharashtra State Road Development Corporation (MSRDC) for 10.2 years for '8,262 crore. The ORR has 22 toll plazas on its 158-km stretch and has much higher traffic volume, was awarded for'7',380 crore.
· PIL before High Court says state government, HMDA have hidden the initial estimated concessional value (IECV) in the ORR deal in contravention of NHAI rules.
· Petitioner Gadeela Raghuveer Reddy of Siddipet district tells court the deal is grossly undervalued
· The deal with IRB Golconda Expressway Ltd for 30 years is for Rs 7,380 crore.
IRB Infrastructure Developers Ltd created the special purpose vehicle (SPV) IRB Golconda Expressway Ltd, with which the ORR deal was struck.
· Government says NHAI rules prohibit revealing the ICEV
· Petitioner tells court, NHAI changed rules, makes it mandatory to reveal the value
· Petitioner says ORR toll for 2022-23 was Rs 542 crore, estimated in 2024-25 at Rs 689 crore.
· Average daily toll revenue is between Rs 1.2 crore and Rs 1.4 crore.
· The offer by IRB Golconda Expressway Ltd would amount to just Rs 67 lakh per day for 30 years.
· 94-km, six-lane Mumbai-Pune Expressway, with six toll gates, awarded by Maharashtra for 10.2 years for Rs 8,262 crore.
· 158-km ORR with 22 toll plazas and much higher traffic volume, awarded for Rs 7,380 crore.
