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GUJARAT TECHNOLOGICAL UNIVERSITY
TATVA INSTITUTE OF TECHNOLOGICAL STUDIES
“ Highway Finance and Taxation ”
Economic Evaluation of Transportation Project
(2721307)
Guided By: Presented By:
Dr. H. R. Varia Bhavya S. Patel (170900713008)
Prit B. Patel (170900713011)
Department of Civil Engineering
M.E. Transportation Engineering Semester 2
April 2018
FLOW OF PRESENTATION
2
Financing of Road Project
Highway finance
Highway financing & taxation
PPP Models
FINANCING OF ROAD PROJECTS
3
Highway finance
Highway financing and taxation.
HIGHWAY FINANCE
4
 Basic Principle:
 Funds spent on highways are recovered from the road users. (direct
or indirect)
 Two methods of highway financing:
1. Pay-as-you-go method. (toll)
2. Credit financing method. (Borrowed money)
 Beneficiaries of highway improvements.
1. Motor vehicle users.
2. Owners of adjacent property.
3. General Public.
Highway Finance:
5
Sources of Revenue:
Toll tax
Taxes on fuels and lubricants
Taxes on new vehicles and spares
Vehicle registration
Special tax on commercial vehicle
Property tax
Highway financing and Taxation in
India
6
Construction of roads in India Financed by
 Central Government
 State Government
 Local bodies (Corporation, Municipalities, District panchayat)
 Taxes levies grouped under
 State Government
 Central Government
Highway financing and Taxation in India
7
Taxes levies grouped under
Highway financing and Taxation in India
8
Various sources of funds in India
1. Central Road Fund (CRF)
2. Central budget in Central & State Govt.
3. State Road Fund
4. Tolls
5. World bank loan
6. Local bodies sources for urban roads
Highway financing and Taxation in India
9
 Various sources of funds in India
1. Central Road Fund (CRF)
Since 1929, recommended by Jaykar Committee
 CRF (Total annual revenue- 100%)
 CRF (Allocation) {80% allocated to State Government on the basis of
petrol consumption}
 CRF (Ordinary) {Balance 20% reserved by Central Government}
 Use of CRF (Ordinary & Allocation): Road research, Traffic
studies, training, Bridge scheme, Purchase of machinery,
Construction of bypasses.
Highway financing and Taxation in India
10
2. General budget in Central & State Government
3. State Road Fund
4. Tolls
 Advantages toll road:
 Well maintained road.
 Good riding quality.
 Traffic restraint measure.
 Disadvantages of toll road:
 Delay
 Period of toll collection
Highway financing and Taxation in India
11
5. World Bank Loan
International finance institution World bank, ADB Loan
available option
Loan available option
I. Soft terms (little or no interest- long term- 50
year)
II. Stiff terms (7% interest)
PPP Models
12
 Understanding PPP
 Why PPP ?
Understanding PPP
13
 PPP (Public Private Partnership)
 GOI Definition: Project based on contract agreement between
Government and private sector company* for delivering
infrastructure services on payment of user charges. (PSP-
Private sector partnership)
PPP
Long term , contractual partnership.
Financing, Designing, Implementing and operating infrastructure
facilities
Collaborative ventures built around expertise and capacity of project
partner as per contractual agreement.
PPP
14
 PPP Strengths and effectiveness
 Robust and dynamic structure.
 Govt. ownership is high.
 Commercial interest protected.
 Transparent.
 Sustainable financing and institutional mechanism with
potential of bridging the infrastructure gap.
 Improved delivery of public services.
 Ability to access capital funding from private sector ( Flow-of-
service payments)
PPP Project
15
 Government should not do in PPP projects.
 Offer project without DPR
 Change goalpost after award of contract.
 Each project as business
 Government should do in PPP projects.
 Support the officers.
 Align economic interest.
 Transparent bidding process.
 No manipulation
 Detailed policy.
 Full support by government.
 Clear policy.
 Defined source of revenue.
 Proper allocation of risk.
16

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Eetp 170900713008 2721307_bhavya

  • 1. 1 GUJARAT TECHNOLOGICAL UNIVERSITY TATVA INSTITUTE OF TECHNOLOGICAL STUDIES “ Highway Finance and Taxation ” Economic Evaluation of Transportation Project (2721307) Guided By: Presented By: Dr. H. R. Varia Bhavya S. Patel (170900713008) Prit B. Patel (170900713011) Department of Civil Engineering M.E. Transportation Engineering Semester 2 April 2018
  • 2. FLOW OF PRESENTATION 2 Financing of Road Project Highway finance Highway financing & taxation PPP Models
  • 3. FINANCING OF ROAD PROJECTS 3 Highway finance Highway financing and taxation.
  • 4. HIGHWAY FINANCE 4  Basic Principle:  Funds spent on highways are recovered from the road users. (direct or indirect)  Two methods of highway financing: 1. Pay-as-you-go method. (toll) 2. Credit financing method. (Borrowed money)  Beneficiaries of highway improvements. 1. Motor vehicle users. 2. Owners of adjacent property. 3. General Public.
  • 5. Highway Finance: 5 Sources of Revenue: Toll tax Taxes on fuels and lubricants Taxes on new vehicles and spares Vehicle registration Special tax on commercial vehicle Property tax
  • 6. Highway financing and Taxation in India 6 Construction of roads in India Financed by  Central Government  State Government  Local bodies (Corporation, Municipalities, District panchayat)  Taxes levies grouped under  State Government  Central Government
  • 7. Highway financing and Taxation in India 7 Taxes levies grouped under
  • 8. Highway financing and Taxation in India 8 Various sources of funds in India 1. Central Road Fund (CRF) 2. Central budget in Central & State Govt. 3. State Road Fund 4. Tolls 5. World bank loan 6. Local bodies sources for urban roads
  • 9. Highway financing and Taxation in India 9  Various sources of funds in India 1. Central Road Fund (CRF) Since 1929, recommended by Jaykar Committee  CRF (Total annual revenue- 100%)  CRF (Allocation) {80% allocated to State Government on the basis of petrol consumption}  CRF (Ordinary) {Balance 20% reserved by Central Government}  Use of CRF (Ordinary & Allocation): Road research, Traffic studies, training, Bridge scheme, Purchase of machinery, Construction of bypasses.
  • 10. Highway financing and Taxation in India 10 2. General budget in Central & State Government 3. State Road Fund 4. Tolls  Advantages toll road:  Well maintained road.  Good riding quality.  Traffic restraint measure.  Disadvantages of toll road:  Delay  Period of toll collection
  • 11. Highway financing and Taxation in India 11 5. World Bank Loan International finance institution World bank, ADB Loan available option Loan available option I. Soft terms (little or no interest- long term- 50 year) II. Stiff terms (7% interest)
  • 12. PPP Models 12  Understanding PPP  Why PPP ?
  • 13. Understanding PPP 13  PPP (Public Private Partnership)  GOI Definition: Project based on contract agreement between Government and private sector company* for delivering infrastructure services on payment of user charges. (PSP- Private sector partnership) PPP Long term , contractual partnership. Financing, Designing, Implementing and operating infrastructure facilities Collaborative ventures built around expertise and capacity of project partner as per contractual agreement.
  • 14. PPP 14  PPP Strengths and effectiveness  Robust and dynamic structure.  Govt. ownership is high.  Commercial interest protected.  Transparent.  Sustainable financing and institutional mechanism with potential of bridging the infrastructure gap.  Improved delivery of public services.  Ability to access capital funding from private sector ( Flow-of- service payments)
  • 15. PPP Project 15  Government should not do in PPP projects.  Offer project without DPR  Change goalpost after award of contract.  Each project as business  Government should do in PPP projects.  Support the officers.  Align economic interest.  Transparent bidding process.  No manipulation  Detailed policy.  Full support by government.  Clear policy.  Defined source of revenue.  Proper allocation of risk.
  • 16. 16