[sustran] Viability and Relevance of Expressways

[kisan mehta]

Dear Friend,

I am giving my response to Mr Jayant Patil, Minister for Finance of the Government of Maharashtra that the 

Mumbai-Pune Expressway has become financially  unviable. This was already pointed to the Government prior to undertaking the construction. I shall appreciate your publishing the same in your esteemed newspaper. 

The Government of Maharashtra(GOM), following the dictats of the World Bank/IMF  to the Government of India, has been blindly constructing highways, expressways, flyovers in Maharashtra. The GOM has set up a fully owned corporation, Maharashtra State Road Development Corporation (MSRDC) for taking up construction of roads throughtout the state  and more particularly in metro cities and links between metros.  

The one that has come up is about 80-90 km sector in the Mumbai Pune Road, which they term as Mumbai Pune Expressway at the cost of Rs 1,600 crores (Rs 16 billion). The MSRDC collects  toll for this sector of  expressway.  We had then proposed to the GOM to build a fullfledged bullet type train service which will bring the commuters to their destination within 75-90 minutes. Our suggestion was not considered.

The GOM Finance Minister has for the first time admitted that the Expressway has proved to be financially unviable, not to talk of immense damage to the environment.  With a very low car ownership and car owners having not to pay anything for construction and use of roads,  the Expressway is highly underutlised.

The MSRDC has a plan to build West Island Expressway in the crowded and congested southern part of Mumbai. The cost has gone from Rs 165 crores to now 5,000 to 7,000 crores.  The expressway will be used by max 20,000 cars in 2011.  We have addressed a letter to the Finance Minister to drop this project on the basis of unsavoury experience on Mumbai- Pune Expressway. 

This may be useful for stopping construction of flamboyant unviable programmes including Bangalore- Mysore Infrastructure Corridor.   Best wishes.

My letter to the Shri Jayant Patil, Finance Minister 

Shri Jayant Patil

Minister for Finance

Government of Maharashtra

Mantralaya

MUMBAI 400 032

Dear Shri Patil,


Viability and Relevance of Public Projects 

The Times of India of 2 October 2001 carries a report on the interaction organised by Maharashtra Economic Development Council where you are reported to have stated that Mumbai-Pune Expressway (MPE) has proved to be financially non-viable. Toll collected from the vehicles falls very much short of even the interest cost of Rs 240 crores payable on Rs 1,600 crores spent for the project. As the Finance Minister, you know that many other costs need to be taken into account to decide the financial and environmental viability of projects undertaken by the State in the name of benefitting the community and/or even the motorists in this case. If other relevant costs are added up, you will conclude that construction of the MPE was Maharashtra Government's biggest blunder. 


With your deep understanding of public affairs, it is improbable that you have not noticed that not a single project undertaken by the Maharashtra State Road Development Corporation (MSRDC) is financially viable, disregarding for the moment the environmental and social costs incurred in the MSRDC taking up disastrous projects. Environmental Impact Assessment (EIA) studies have not been taken for none of the projects undertaken to help the motorists. Ministers and the government have given unrestricted licence to the MSRDC to take up projects in areas that do not belong to the Government like Mumbai, Pune, Nagpur etc where there is no legal duty or ethical liability on the government or the MSRDC to meddle. The concept of local self government, so well nurtured over decades has been given a go bye. This infringement has damaged beyond repair the public interest and public good. 


You are aware that the MSRDC embarked without any need on a programme for constructing 50 and odd flyovers and elevated roads costing over Rs 2,000 crores when the MMRDA, Indian Railways, Municipal Corporation of Greater Mumbai, BEST Undertaking and Mumbai Police were negotiating with the World Bank for assistance for the MUTP II which met citizens' need for better public transport. The WB withdrew from the MUTP II on learning about MSRDC's unwarranted intervention. We have not been able to take up the MUTP II due to constant financial crunch. Not only all flyovers are financially and environmentally unviable, they have damaged the ultimate interests of Maharashtra. Mumbai's traffic and transport problems have since worsened. Hardship of the common man has multiplied. This has disabled the Maharashtra Government from taking up more urgent projects like stopping starvation deaths and providing water to thirsty Maharashtrians. Maharashtra has the highest number of starvation deaths in India. 


As if this is not enough for the Maharashtra Ministers to understand the damage to the economy and to the people of Maharashtra, Ministers have asked the MSRDC to pursue West Island Freeway (WIF) in Mumbai's Island City. Cost of the Bandra-Gateway of India project originally estimated at Rs 165 crores is now likely to be anything between Rs 5,000 to 7,000 crores depending on the number of cable stayed pre-stressed bridges to be put up. Number of vehicles likely to avail this facility even in the year 2011 is estimated at 20,000 a day only. What is the financial viability of this project and which of the motorists you wish to serve at public cost?


The Maharashtra Government and MSRDC do not care to place the basic data before citizens who have a stake in Mumbai's well-being. We understand that the project shall require three to four towers of 200 metre height erected in the sea in front of Shivaji Park, Haji Ali, Girgaum Chowpatty and Mantralaya. It will bring the Raj Bhavan, Ministers' bungalows and Government offices in easy firing range of the enemy. Towers will make Mumbai easy target of Pakistan's land to land missiles developed with the US/China assistance. Towers even damaged (and not broken down) by enemy action will collapse with thousands of vehicles and occupants sinking in the sea. Many more thousands of people in the nearby areas will die. In addition to the financial disaster, the Government is deliberately contributing to irreparable damage to Mumbai, much larger than what one recently witnessed in New York and Washington. 


You know that motorists are not going to bear the cost of constructing the WIE. In fact the Maharashtra Government has directed the Municipal Corporation to stop charging the paltry wheel tax at a rate fixed 70 years ago to help motorists while users of public transport are required to pay 120 times the fare. 

May we request you to make public the financial viability studies of the WIE and get the Cabinet decision to ask the MSRDC to stop construction of not only of the WIE and also all programmes throughout Maharashtra and its cities. The irresponsible and secretive working of the MSRDC so far requires total closing down of the MSRDC. Sooner the Government acts to close down the MSRDC, the better it would be not only for Maharashtra but for India. Mumbai's 12 million people would be saved from the provocative enemy action. Closing down of the MSRDC will give Maharashtra financial liquidity to take up socially more important and urgent projects in the State. 


We are ready to talk with and explain to you, Chief Minister and other Ministers as well as with government officials if you still have doubts in our submission. The US and Western Powers have already through the UK Prime Minister clarfied that attacking terrorism widely prevalent in India is not on their agenda. Attack on Bin Laden and Taliban is bound to increase terrorism in our country now. Any Indian concerned about the well-being of Indians will not embark on programmes likely to bring disasters and more disasters for the people. We await your prompt response.


Yours sincerely



Kisan Mehta 

President 

Save Bombay Committee

620 Jame Jamshed Road, Dadar East,

MUMBAI 400 014

Tel: 00 91 22 414 9688  Fax: 00 91 22 415 5536


Email: kisansbc at vsnl.com 



Encl: Copy of the Times of India Report


Times of India, Mumbai dated October 02, 2001


TRAFFIC PROJECTIONS GO AWRY: EXPRESSWAY PROVES NON-VIABLE


By Vidyadhar Date

Times News Network


MUMBAI: The Mumbai-Pune expressway is proving to be financially non-viable. The Maharashtra State Road Development Corporation, which had invested Rs 1600 crore in the Project and has to bear an annual interest burden of Rs 240 Crore, stands to get only Rs 28 Crore annually by way of toll.


According to finance minister Jayant Patil, traffic projections for the expressway have gone awry. The traffic should have increased but has actually gone down. And this has happened in the most advanced part of the state and in spite of the fact that the expressway had been built to the international standards.


The finance minister made these observation during an interaction with representatives of McKinsey & Company, which has recommended to the Centre measures to improve the Indian economy, and leaders of business and industry organised by the Maharashtra Economic Development Council.


The minister said he supported privatisation and liberalisation but pointed out unhappy experiences regarding certain projects, including Enron. He said several questions regarding the Enron project had been raised at the Indian Institute of Management, Ahmedabad. It was strange that in this case the private sector had not taken any responsibility or risk, he said, adding that the Government was now in a piquant situation-"it cannot get out of the project nor can it afford to go along with it."


The Government would not have money to buy coal for other projects of the State Electricity board or to pay wages to the employees of those projects if the second phase came up, he said.


Clarifying that he was not against privatisation, Mr. Patil said the government was facing some problems and would like to consult McKinsey on these issues.


Shirsih Sankhe, partner of McKinsey said the Enron mess could be attributed to the lack of competition. The project had been finalised without competition, he said. Elsewhere, privatisation of the power sector had worked out, he said, adding that in Mexico, where in consultancy, privatisation had brought down the cost of power.


However, the minsiter pointed out the privatisation of the electricity sector in Andhra Pradesh and Orissa was also not encouraging. The Maharashtra State Electricity Board was doing well till a few years ago, he added.


He also questioned the need for a second international airport for Mumbai. "It is fashionable to talk about the second international airport but the question is whether the present airport itself is being used to its full capacity. Unless, there is growth in other sectors, there is no need for another airport, he said. 


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