The Coimbatore Bypass Road Project
 <<Previous
CHALLENGESL&T faced problems with the tolling
of the old Athupalam bridge, which did not come within the route of the
bypass. This bridge was an already existing facility being used by the
incoming traffic from Kerala to Tamilnadu. Transport operators had initially
refused to pay the tolls. The bulk users of the bridge including the state
transport corporations of Tamilnadu and Kerala had refused to pay the tolls.
|
The Tamilnadu state government too backtracked and
sought concessional tariff for state transport buses on the plea that
the transport department was in the red. The Tamilnadu government was
willing to pay only Rs.50 per bus for making more than three trips a day
instead of the originally planned Rs.15 per bus per trip. L&T agreed to
the subsidized toll rate on the condition that the state government
compensated the revenue losses sustained by the company[9]. |
|
The Coimbatore District Bus Owners Association (CDBOA) and
the Lorry Owners Association refused to pay even the subsidized tariff. The
CDBOA had even taken the issue to Madras[10] High Court against the tariff but
the Court directed the private operators to pay the toll charges. However,
they refused to comply with the court's orders.
Since December 1998, L&T was unable to collect the tolls from road users and
this resulted in a loss of Rs.74.1 mn as of June 2000. This included Rs.11.4
mn due from the Tamilnadu government towards reimbursement of losses
incurred out of the subsidized toll payment for the state transport buses.
N R Naramsimhan, GM (developmental projects)- L&T felt that unless the state
government gave L&T powers to deal strictly with the non-payers, it would be
impossible to recover the investment. He felt L&T might even request the
state government to take over the project. L&T contemplated on invoking the
force majeure clause[11] and pulling out of the project. L&T was also under
tremendous pressure from the financial institutions, which had lent money,
to create additional securities. MoST had asked the state government to take
a quick decision as a delay would have an adverse impact on other BOT
projects in the state.
QUESTIONS FOR DISCUSSION
ADDITIONAL READINGS AND REFERENCES
[9] About 230 buses made a minimum
of 2,180 trips a day. L&T claimed that it would sustain a loss of Rs.20,000
per day on government vehicles alone.
[10] Madras (renamed Chennai) is the capital of Tamil Nadu.
[11] Force majeure is an event or accident beyond any person's control. It
includes natural disasters (or acts of God), mass acts of human agency, such
as war and civil strife.
2010, ICMR (IBS Center for Management Research).All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted
in any form or by any means - electronic or mechanical, without permission.
To order copies, call +91- 8417- 236667 or write to ICMR,
Survey No. 156/157, Dontanapalli Village, Shankerpalli Mandal,
Ranga Reddy District,
Hyderabad-501504.
Andhra Pradesh, INDIA.
Ph: +91- 8417- 236667,
Fax: +91- 8417- 236668
E-mail: info@icmrindia.org
Website: www.icmrindia.org
|
More Classifications...