CAG raps Maha govt for continued fuel cess collection in Mumbai, nearby areas
The Comptroller & Auditor General (CAG) of India has rapped the Maharashtra government for continuing to collect 1% cess on petrol and 3% on diesel in Mumbai and adjoining towns, even after recovering the cost of construction of 37 flyovers in Greater Mumbai in November 2010, with the securitised amount of Rs 2,100 crore.
CAG has observed that the excess cess burden on the public was therefore financially not justified.
CAG’s scathing remarks in its report for year ended March 31, 2015, come at a time when the chorus is rising for exempting small vehicles from toll collection from five Mumbai entry points. At present, vehicles entering and exiting from Mumbai pay both toll and fuel cess.
CAG referred to the construction of 37 flyovers by the state-run Maharashtra State Road Development Corporation (MSRDC) at the total cost of Rs 1,065.25 crore between September 1997 and August 2002 on build operate transfer (BOT) basis. The state government subsequently decided that the cost will be recovered through toll, advertising and fuel cess on sale of petrol and diesel in Mumbai, Thane and Navi Mumbai Municipal Corporation areas. The Mumbai Entry Points (MEP), which was awarded toll collection contract from 1999-2000 onwards, had already collected Rs 1,058.66 crore up to October 2010. Incidentally, MEP also received fuel cess from the state government.
Thereafter, MEP was awarded contract for securitisation of toll rights for a period of 16 years from November 20, 2010 to November 2026 for an upfront receipt of Rs 2,100 crore. “We observed that taking into account the internal rate of return (IRR) at 16.12% for the project cost as approved by the Maharashtra government on MEP’s proposals, the entire project cost stood recovered in November 2010 itself with the securitised amount of Rs 2,100 crore and cess received, yet MEP continues to receive fuel cost from Maharashtra government. The excess cess burden of the public was therefore financially not justified,” CAG viewed.
CAG has reiterated discontinuation of fuel cess through its communication on December 2015. However, the government’s reply is still awaited.
