Following a boycott of toll called by The All Gujarat Transport Association, 19 lakh commercial vehicles in Gujarat have decided not to pay tolls on two major highways – the Vadodara-Halol and Adalaj-Mehsana highway –  from December 21 in protest for the the high amount of tolls already collected.

The toll tax collection on these roads has been in place since 2001-2002. The transport association has already submitted a formal letter in this regard to the government.

As per the association, the roads built at a cost of ₹500 crore, have already generated approximately ₹3,000 crore in toll revenue. Despite this, the firm maintaining these roads has requested an extension of toll collection until 2040.

According to Mukesh Dave, the former president of the Indian Transport Association, when the contract was signed with the government, the company demanded a 20% annual profit, which resulted in a ₹375 crore dividend on the ₹500 crore investment. However, the company has claimed to have suffered losses.

By June 2009, the company had collected ₹939.41 crore from the Vadodara-Halol road and ₹797.72 crore from the Adalaj-Mehsana road, totalling ₹1,737 crore. In the next 15 years, the toll revenue increased by approximately ₹3,000 crore. Nevertheless, the company has continued to raise the toll rates. A complaint regarding the hike in toll charges was filed in September 2023.

Company claims losses while paying dividends

The company that built the roads under the Build, Operate, and Transfer (BOT) model is still claiming losses. However, in the 2023-24 financial year, the company paid a 72.75% dividend to its shareholders, amounting to ₹395 crore on shares with a nominal value of ₹10. In total, the company has paid ₹675 crore in dividends over the years. According to the company’s balance sheet, it has made a profit of ₹1,870.10 crore, excluding depreciation and interest expenses.

Since 2001, the company has been sold twice. Initially, IL&FS bought 59.80% of the shares for ₹750 crore. Recently, the company sold 89.30% of its shares to foreign investors for ₹2,952 crore. The company also sought ₹935 crore in compensation for not collecting tolls from private vehicles between August 2016 and July 2020, due to the non-collection of tolls from these vehicles.

Extended toll collection permission until 2030

The company had set a condition that it should make a profit of ₹100 crore in a financial year. If the company only made ₹75 crore, the remaining ₹25 crore would be added to the capital, and the company would be allowed to earn a 20% profit on that extra amount. Based on this, the company has been given the right to collect tolls until 2030. Under this agreement, the Gujarat government allowed the recovery of ₹1,910 crore, with the expectation that this amount would be collected by 2030.

However, the company has now expressed doubt about recovering ₹1,910 crore by 2030 and is requesting further toll collection extensions.

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