• Price of making DND Flyway free to use amounts to Rs5,000 crore

    The New Okhla Industrial Development Authority (Noida) will have to pay Rs.5,000 crore to the company operating the DND Flyway connecting Delhi and Noida if the government entity terminates a 30-year contract at its mid-point and takes over the toll road.

    Last week, the Allahabad high court barred Noida Toll Bridge Co. Ltd, which operates the flyway, from collecting toll. The 117,000 vehicle owners using the 9.2km toll road every day save money—cars pay Rs.28 for a one-way trip.
    But Noida Toll Bridge, which is promoted by IL&FS and is a listed company, is losing Rs.30 lakh a day and its market capitalization has eroded by about 30%.

    The first memorandum of understanding to build a New Delhi-Noida expressway was signed under the public-private partnership (PPP) mode in 1992, a year after India initiated economic reforms. The toll road started operations in 2001.

    This is a 30-year build-own-operate-transfer (BOOT) contract, where Noida Toll Bridge would operate the flyway for 30 years or until it recovered its investment.
    Further, it was promised an assured return of 20% on its total cost, which included the initial project cost, the running cost and the shortfall in profit.
    The result: the road cost Rs.378 crore to build, but this unmet assured return of 20% has led to the total cost under the agreement spiraling to Rs.5,000 crore in 15 years.

    After a slow start, DND Flyway is now reporting healthy profits with three-fourths of toll revenue coming in as profits. In 15 years, Noida Toll Bridge earned Rs.1,052 crore via toll collection and a cumulative net profit of Rs.348 crore.
    Nearly eight out of 10 vehicles crossing the toll booth is a car, probably fuelled by development of residential areas in Noida and Greater Noida. Total number of vehicles crossing has increased by nearly six times in the last 15 years. Linus Ullmark Authentic Jersey

    Share This
    Facebooktwitterlinkedinyoutube