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Monday, 03 Mar 2014
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Private sector funding is imperative to support and boost infrastructure growth in the country
  Vinita Singhania
Vivek Rastogi,
  Vivek Rastogi is the Managing Director of Feedback Brisa Highways OMT Private Limited (FBH). He has been a management consultant with companies such as McKinsey & Co. and Feedback. He also brings extensive operational experience across different industries and has been associated with different aspects infrastructure advisory, financing, design and execution throughout his career. Mr. Rastogi holds a B.Tech (Computer Science) degree from Indian Institute of Technology, Mumbai and an MBA from the Indian Institute of Management, Ahmedabad.
Highway

Tell us about Feedback Brisa Highways OMT and its operations?

 

Feedback Brisa Highways OMT Services Pvt. Ltd. (FBH) is a Joint Venture between the two leading companies in the Infrastructure sector: Feedback Infra Pvt. Ltd. and Brisa Auto Estradas de Portugal SA (Brisa). Brisa, a major European highway concessionaire, has been in the Operations, Maintenance and Tolling (OMT) business for the last 40 years. Today, FBH is a leader in the outsourced Highways OMT market, with over 2,500 lane kms under its fold and all across India.


The company offers professional end-to-end services across tolling, route operations & incident management, routine maintenance and IT system support through its highly experienced leadership, high integrity culture, and cross-India presence.

Is there a future for PPP projects in India? Your views?

 

India has embarked on a very ambitious PPP program. Why? Private sector funding is imperative to support and boost infrastructure growth in the country. This is unlikely to change in an economy such as ours. Hence, PPP will continue, but its form and shape will change in terms of an independent regulator; long term funding sources; less aggression in bids; true concessionaire bids; active secondary market for project sale and purchase.


The industry has matured – thanks to the recent economic crisis. The next stage of growth should have many players bidding for PPP projects but with a different mindset and approach.

The attacks on toll nakas are on the rise across India. How will this phenomenon affect infrastructure projects? Are there any win-win solutions to mitigate these types of protests?

 

The recent attacks on toll nakas are mainly incited by political set-ups and local mafia. However, there are lessons to be learned in terms of improving customer experience. Toll plazas certainly need to have mechanisms to minimize waiting time. Also, there has to be a co-relation between toll payment and road construction and maintenance. No one would like to pay toll for poorly-maintained or under-construction roads.


Setting up an independent Highways Regulator and a high-powered Road Safety Commission could help monitor and improve operations of toll nakas, and thus help mitigate public dissent. In addition, Highway concessionaires can make their OMT more user-oriented and professional to deliver better value to each customer.

Toll revenue pilferage remains a big concern of the industry, impacting profitability? Comment.?

 

Toll revenue pilferage is a misconception in the industry. Pilferage or theft of toll revenue is less prevalent than is commonly believed. A few bad examples of concessionaires and/or poorly managed staff and/or unprofessional OMT (Operations, Maintenance & Tolling) players have created an impression that colours the whole highway industry with the same brush.

Tolling in India is a cash business and hence poor controls do lead to some small pilferage. This is not the main point for toll revenue losses. Revenue losses occur due to three primary reasons:


 
  • Traffic diversion from the toll roads – this happens primarily due to lack of good coordination between the National Highway Development Authority of India (NHAI) and the State Road Development Corporations

  • Exemptions – traffic that does not pay toll even when it is supposed to – local factors is one common reason for this, but lack of controls and poor training also lead to high exemptions

  • Complacency in OMT teams which accept the status quo and do not want to maximize revenue. The project owners want revenue maximization but lack OMT expertise or simply do not have the time to chase 24x7 operations.

Hence, pilferage is not the culprit of low industry profitability. Many projects today suffer since they were won with bids and which are not financially viable now, and/or the projects have such a large debt service that toll revenue will never be adequate to meet all the requirements of a Concession Agreement.


 
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