TOLLING OPERATIONS OF NHA 1
SEQUENCE OF PRESENTATION • Introduction • Tolling under NHA ACT • History of Tolling in NHA • Justification of Toll Plazas • Toll Plazas on NHA Network • Last Auctions of Toll Plazas • Tendering Procedure • Year wise Revenue from Toll Plazas • Status of Payment to NHA by FWO • Status of Payment to NHA by NLC • Leasing of NHA Land – Present Status – Extension in Leases 2
Introduction • NHA - a body corporate established under NHA Act 1991 for the road sector development in the country. • NHA vision focuses on maximizing Off Budget financing for preservation of existing federalized road network and to provide efficient services to road users • Revenue generation through commercialization of road sector is vital to achieve this objective 3
Tolling under NHA Act 1991 • Statutory Provisions The clause 10 sub clause-2 (vii) of Chapter III “Powers and Duties of the Authority” of NHA Act 1991 (As amended 2001) empowers NHA to: “l evy, collect or cause to be collected tolls on National Highways, strategic roads and such other roads as may be entrusted to it and bridges thereon: ” 4
History of Tolling in NHA • The collection of Toll on Motorways started in Nov 1997 • In July 1999, the Federal Government directed to transfer the rights to collect tolls on National Highways to NHA • For National Highways the tolling commenced in 1999 • In 1999 Road network of NHA was more than 7000 KMs and there was a need to establish writ of the Authority in implementing toll culture 5
History of Tolling (Contd….) • With Motorway-2 becoming operational in Nov 1997 FWO was engaged for tolling for a period of 10 years • Initially, NLC and FWO were assigned two major routes N- 5 and N-55 in 1999 for tolling operations on a term of 10 years • Subsequently, FWO and NLC were given toll collection services on N-35, N-40 (Lakpass – dalbadin – Taftan), N-65 (Sukkur – Sibbi – Quetta), N-70 (Multan – D.G Khan – Qila Saifullah) and N-80 (Tarnol – Fatehjang – Jand – khushalgarh – kohat) • Arrangement with NLC & FWO continued till Oct 2008 on National Highways 6
Privatization of Toll Collection • Senate of Pakistan in 2008 while acknowledging efforts of FWO and NLC over the past decade stressed on gradual privatization of Toll Plazas • The implementation plan directed by Senate in 2008 said as: – i) 25% plazas to be floated for competitive bidding within one (1) year – ii) This practice to continue and 100% privatization to be achieved in next four years – iii) FWO and NLC can also bid in open competition 7
Justification of Toll Plazas • Tolling policy approved by National Highway Council (NHC) in 2011 whereby a toll plaza can be established after every 35 to 60 km on National Highways • Toll Revenue collected from road users is transferred to RMA for maintenance and road safety of National Highways and Motorways • List of Toll Plaza (Road Wise) 8
Toll Plazas on Motorways and Highways Monthly Revenue Revenue No. of (2012-13) Description Sr. Toll (2012-13) (Rs. In Plazas (Rs. In Millions) Millions) 1 Punjab 33 518 6,217 2 Sindh 20 229.50 2,755 3 Khyber Pakhtunkhwa 7 50.50 607 4 Balochistan 11 10 128 Sub-Total (National Highways) 71 808 9,707 5 11 69 830 Islamabad – Peshawar Motorway (M-1) 6 18 2,217 185 Lahore – Islamabad Motorway (M-2) Pindi Bhattian – Faisalabad Motorway 7 3 18 212 (M-3) Sub-Total (Motorways – M/s FWO) 32 272 3,259 8 E-Toll on Motorways - NADRA 393 32.70 TOTAL 103 1,113 13,359 9
Last Auctions of Toll Plazas Sr No Bidding Date No of Toll Plazas 1 22 April, 2013 40 2 04 JUNE, 2013 12 3 13 November, 2013 08 4 12 December, 2013 01 10
Procedure of Tendering of Toll Plazas • Bidding is conducted as per Public Procurement Regulatory Authority “PPRA” Rules in the manner as under: i) Pre-Qualification “PQ” notice for every bidding process is published in three National Dailies (Two English & One Urdu) and also Loaded on PPRA and NHA websites ii) Response time 15/30 days as per clause 13(1) of PPRA Rules ii) PQ is done through a committee called Bid Opening & Evaluation Committee as given in Table-III Chapter 3 “Tendering Process” of NHA Code Volume-I iv) Successful applicants are informed through letters about their pre- qualification and invited to purchase the Request for Proposal “RFP” at a very nominal price and return the filled document before bid opening under a Sealed Envelope 11
Tendering Procedure (Contd ….) vi. Sealed bids so received are opened on a given date and time by the Bid Opening & Evaluation Committee “BO&EC” in the presence of all bidders and/or their representatives vii. Details like name of the firm, amount of bid, earnest money are announced by the committee viii. BO&EC evaluates the received bids and forwards its recommendations to a higher committee i.e. Acceptance Committee ix. Acceptance committee recommends the case to Chairman NHA for approval of award or otherwise 12
Year wise Toll Revenue Rs. in Billion No of No of Years Revenues Years Revenues Toll Plazas Toll Plazas 54 1.8 86 7.2 2000-01 2007-08 68 2.3 86 7.5 2001-02 2008-09 70 2.8 99 9.2 2002-03 2009-10 2003-04 71 3.3 2010-11 99 11.3 2004-05 75 4.0 2011-12 99 13.3 79 6.0 100 13.4 2005-06 2012-13 86 6.2 103 *6.6 2006-07 2013-14 * Toll Collection of 6 months 13
Status of Payments to NHA by FWO Rs. in Million Years Total Gross Toll Collection Gross Toll O & M Net Toll Collection on Expenses Collection M-1 M-2 M-3 Motorway 2009-10 578 1,556 181 2,315 483 1,832 2010-11 761 1,872 199 2,832 506 2,326 2011-12 861 2,207 214 3,282 529 2,753 2012-13 800 2,193 210 3,203 552 2,651 14
ISSUES with FWO • Since Mar 2009 FWO started withholding Motorways revenues on the plea of non payment on their PSDP Projects • PAC on 7 th June 2012 directed NHA & FWO to settle their issues as follows : i. Determine and settle receivables and payables due to each other through reconciliation by 30 th June, 2012 ii. From July 2012 onwards FWO to remit monthly revenues of Motorways to NHA 15
Status of Adjustments Rs in Millions Description 7,985 Revenue Receivable from FWO (FY. 2009-10 to 2011-12) (Less): Payable Operations & Maintenance Charges to FWO (2,230) for the period (FY. 2009-10 to 2011-12) 5,755 Net Receivables from FWO (A) (Less) Certified IPC’s of Development Projects of FWO adjusted by NHA against the RMA Revenues Receivables during 2,811 F.Y 2012-13 F.Y 2013-14 1,020 (Till 14 th Feb 14) (3,831) Total Amount Adjusted (B) 1,924 Balance Available for Adjustment against Future Bills C=(A-B) 16
Status of Payments to NHA by FWO • During F.Y 2012-13 FWO has deposited Rs. 3,203 (M) on account of motorways revenue • Toll Collection for 2013-14 : Rs. in Million Total Collection (upto Dec 2013 ) 1430 Paid to NHA (750) O & M Share of FWO (240) Provisional Adjustment against (317) Cost of Thalian Link and others Balance Receivables 123 17
Status of Payments to NHA by NLC Years Rs. In Million 2009-10 1,728 2010-11 1,997 2011-12 3,085 2012-13 4,192 2013-14 2,055 (upto Dec 13) 18
Leasing of NHA land • N-5 along with other Provincial roads were federalized through an Act of Parliament in 1991 and it was decided that NHA shall exercise all such powers which were previously being exercised by the Provincial Government • To regularize the facilities already established within the Right of Way “ROW” two options were available i.e. Leasing of NHA land and issuing of NOCs for RoW as per provision of NHA Act • Investors for leases were invited through print and electronic media in 2001 • An SOP for Commercialization of ROW was formulated in 2002 and was approved by the Executive Board 21
Leasing of NHA land (Cont…) • Around one hundred (100) agreements were signed till 2004 however on the instructions from MoC all these agreements were cancelled • The High Court restored the agreements in 2005 after one year of litigation • The Punjab Government in 2005 ordered DROs to cancel mutation of ROW in the name of NHA and transfer it back to Punjab Government • NHA filed a writ in 2005 and the Lahore High Court said “that the cancellation of mutation by the Provincial Government through an impugned letter is against the principle of natural justice” and asked the DROs to decide afresh after hearing 22 both parties
Leasing of NHA land Present Status • The mutation issue is still un-resolved and NHA’s name is shown in Khanakasht in land record. • During September 2013 in a meeting held between Chief Secretary Punjab, Secretary Communications, Chairman NHA and Member BoR Punjab different options were discussed to resolve the issue • Efforts are in hand to resolve the issue amicably 23
Extension in Lease Agreements • Till September, 2007 a total of 207 lease agreements were signed throughout the network out of which 56 cases have been established • For remaining no facility could be established • Over 100 cases are in Punjab where DROs are not issuing NOCs due to ownership dispute • Leases were granted for the period of 30 Years thereafter it will be auctioned again ( No lease case has yet reached the maturity ) 24
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