CAG slams toll waiver on Mumbai-Pune expressway during Covid-19 lockdown
It stated that the waiver granted to IRB MP Expressway Private Limited, entrusted with collecting toll on the Mumbai-Pune highway, during the lockdown period in 2020, violated the agreement with Mumbai Pune Expressway Limited (MPEL), which is owned and controlled by the Maharashtra State Road Development Corporation (MSRDC).
As per the sub-concession agreement on February 28, 2020, the IRB was allowed to collect toll for 10 years from March 1, 2020, to April 30, 2030, for a fee of Rs 8,262 crore.
The MSRDC granted a waiver to IRB MP Expressway after it pointed out that the toll collection was disrupted during the lockdown, which constituted a 'force majeure' (unforeseen) event.
'The upfront amount payable by IRB to the MPEL was Rs 6,500 crore (due on 01 March 2020 with interest 9.5 per cent per annum, if delayed) while the balance Rs 1,762 crore was payable in the next three years,' it said.
The audit report pointed out that Article 25.1 of the agreement prescribed that IRB shall effect and maintain suitable insurance cover at its own cost to cover third party claims and 'force majeure' events that include acts of God, epidemic, earthquake, flood, landslide, cyclone, strikes or boycotts, any court orders, geological conditions, and similar circumstances of nature. 'Force majeure' refers to the clause that frees both parties of liabilities in case of such catastrophic events.
The agreement provides that the parties shall bear their respective force majeure costs in case of any loss arising due to the occurrence of such non-political events, and neither party shall be required to pay to the other party any cost thereof.
The report stated that the IRB, however, did not insure its business for force majeure events.
'IRB requested (24 March 2020) MPEL to bear the losses of toll revenue and grant a waiver in the sub-concession fee. MPEL rejected (09 April 2020) the claims, citing the relevant clauses pertaining to non-political force majeure events. Thereafter, upon continued requests from IRB to consider their case for suitable compensation, the Board of Directors of MPEL, in its meeting on April 20, 2020, agreed to provide compensation based on the computation of revenue loss for 25 days in toll collection. The amount of compensation was worked out to Rs 71.07 crore, as prescribed by the Board,' the report said.
'Thus, payment of force majeure cost of Rs 71.07 crore by MPEL to IRB was in contravention to the provisions of the Agreement and undue favour to IRB to the said extent,' it said.
Following the dispute, a mediation report dated October 13, 2023, advised IRB to remit the amount of Rs 71.06 crore to MPEL. The government stated in December 2023 that the recovery of Rs 71.07 crore has been initiated and that MSRDC has been directed to recover Rs 71.06 crore from the contractor within three months, the audit stated.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
CII summit flags need for better regional connectivity to boost devpt
Mangaluru: The issue of lack of connectivity posing a major hurdle in Mangaluru's march towards the Silicon Beach and Beyond Bengaluru initiatives took centre stage at the Infrastructure & Logistics Summit organised by Confederation of Indian Industry (CII) Mangaluru here on Thursday. Delivering the keynote address, New Mangalore Port Authority (NMPA) chairman Venkata Ramana Akkaraju said even after 75 years of Independence, connectivity from the rest of Karnataka to the west of the state has not improved, hindering the progress of the coastal districts. "Infrastructure, connectivity, and GDP growth are complementary to each other. Udupi and Dakshina Kannada contribute Rs 1.2 lakh crore of to the GDP of Karnataka, with per capita income being around Rs 4.92 lakh. Yet, we have to accept that coastal Karnataka is still missing the bus," he said. Within the state itself, there have been connectivity issues. Mangaluru-Bengaluru NH 75 and NH 275 to Mysuru were a work-in-progress for several years, often closed during heavy rains. The Mangaluru-Hassan rail connectivity, too, often gets affected due to heavy showers. Given such a situation, Mangaluru-Bengaluru airfares have shot up to Rs 10,000. In spite of the many challenges, NMPA has increased its cargo handling from 34 million tonnes to 46 million tonnes in the past five years, with profit after tax rising from Rs 110 crore to Rs 550 crore. The port could have handled more than 65 million tonnes of cargo, increasing its profit by an additional Rs 150 crore, had there been adequate connectivity, Akkaraju claimed. S Selvakumar, the principal secretary in the commerce and industries department, said: "Karnataka ranks No. 1 in per capita gross state domestic product (GSDP) in the country, and No. 2 in foreign direct investment as well as GST contribution." He added that the state's Industrial Policy 2025-30 is focused on developing world-class infrastructure. '92% willing to return home' Suyog Shetty, the CEO of Niveus Solutions, said 92% of the talent that migrated from the coastal region of Karnataka are willing to return home if there are meaningful alternatives. Speaking on 'Mangaluru as the Next Tech Destination: Leveraging Cloud, Talent, and Innovation' at the CII summit on Thursday, Shetty highlighted the need to engage local talent in the state's development journey. "If you offer the right opportunity and adequate salary, people will return to Mangaluru," he said. He said the Karnataka govt's policy, availability of land, and proximity to power sources are very favourable for anyone to set up data centres in Mangaluru. According to G Sundararaman, the chief scientist and head of Wipro Research, India is in an absolute tech decade with vast opportunities in the semiconductor industry. The cascading effect could be felt in Mangaluru as well, he added. Underscoring the cost benefits of acquiring office and residential spaces in Mangaluru, Rohith Bhat, the founder of Robosoft, said: "The region has a good ecosystem, with companies referred to as 'talent capitals'. There are several engineering and other colleges around. This massive talent pool allows firms to acquire the best brains from within the region itself." Suvin Narayan, representing the Karnataka Digital Economy Mission, spoke on 'accelerating digital infrastructure in Tier-II cities: KEDM's Vision for Mangaluru'.
Time of India
an hour ago
- Time of India
Chandigarh's vehicle scrapping policy stuck in 1st gear
Chandigarh: Despite a full tank of incentives, Chandigarh's vehicle scrapping policy is sputtering. Launched over 18 months ago with the promise of cleaner roads and greener air, the city's Registered Vehicle Scrapping Facility (RVSF) has managed to scrap just 3,159 private vehicles—a drop in the ocean compared to the 50,000 new vehicles registered last year. Tired of too many ads? go ad free now By October last year, only 1,065 private vehicles were scrapped. "There is a marginal increase in the rate of vehicles getting scrapped, but it is still very low. There was an expectation that the policy with monetary incentives built-in would attract more vehicle owners," said a UT official. Vehicles registered with the 'Certificate of Deposit' receive a rebate on the registration of new vehicles. Transport vehicles get a 15% rebate, and non-transport vehicles get a 25% rebate on registration. The Certificate of Deposit is issued by the RVSF after the old vehicle is scrapped. Additionally, the scrap value of the vehicle is paid by the authorised scrapping agency. As per the information shared by the Ministry of Road Transport and Highways in the Lok Sabha during the ongoing monsoon session of Parliament, 5,068 govt vehicles were scrapped at the RVSF. By October last year, 2,500 govt vehicles were scrapped at the RVSF. "While it is mandatory for govt vehicles to be scrapped at the RVSF after 15 years in service, for private vehicles in the city, it is still a voluntary exercise. Around 50,000 vehicles were registered last year, but in one and a half years, only about 3,000 vehicles were scrapped. Most vehicle owners get the life of their vehicles extended by repeatedly getting them passed," said a UT official. The passing of a vehicle after 15 years is done manually in the city. Tired of too many ads? go ad free now "In-depth testing of the vehicle is not possible manually, so most vehicles get passed. Automated and mechanical testing is required to filter out the road-unworthy vehicles, which can then be scrapped," said the official. AICC start to push up scrapping of pvt vehicles The UT officials contend that the start of Chandigarh's first automated inspection and certification centre, likely to be in the next financial year, will bring in scientific testing of old vehicles. The centre, coming up at a cost of around Rs 14 crore on a 3.5-acre plot in Raipur Kalan, will check the technical quality of the vehicle, whether it meets the environmental stipulations, and its roadworthiness. "Currently, the process of checking the roadworthiness of a vehicle involves a lot of human discretion. Sometimes it results in even vehicles in poor condition getting roadworthiness certificates. But after the centre starts operations, the entire process will be automatic. In total, a vehicle will be tested against 23 parameters," said the official. The registration of vehicles beyond 15 years depends on their roadworthiness. If the vehicles are not roadworthy, they have to be scrapped at the registered RVSF. "Vehicles that continue to be operated for two years even without mandatory passing after they complete the 15-year service period can be impounded and sent for scrapping," said the official.
Time of India
an hour ago
- Time of India
‘I'd fire him': Trump takes shots at Powell while standing beside him during Fed visit; watch video
Screengrab from Trump's interaction with reporters during Fed visit US president Donald Trump on Thursday visited the Federal Reserve's renovation site in Washington, DC — and used the opportunity to take fresh shots at chair Jerome Powell. Standing in front of the half-finished project, Trump mocked the rising costs. 'It looks like it's about $3.1 billion. It went up a little bit — or a lot,' he said, while Powell shook his head in disagreement. Asked by a reporter how he'd handle such a budget mess as a developer, Trump didn't hold back, 'I'd fire him!' — RapidResponse47 (@RapidResponse47) The central bank's renovation was originally estimated at $1.9 billion. Now, it stands at $2.5 billion. The Fed says the hike is due to inflation, old infrastructure, and post-Covid material costs. But Trump and his aides say it's more than that — calling it excessive and accusing Powell of poor oversight. The visit was rare. Presidents usually avoid appearing to influence the independent central bank. But Trump has long clashed with Powell, criticising him for not lowering interest rates fast enough. At the site, Trump again pushed for rate cuts. 'Our country is the hottest in the world right now,' he said. 'But people can't buy homes because the rates are too high.' The Fed is expected to hold rates steady again next week — despite mounting political pressure.
