Govt may pay ₹4,500 crore annually to toll operators for FASTag pass

ICRA said the annual FASTag pass will cost the government Rs 4,200-4,500 crore in compensation to toll operators, though relief for commuters will be limited to private vehicles

While highway users may be seeing relief due to the annual pass, rating agency ICRA on Tuesday said the burden on the central government to compensate private toll operators on national highways would be in the range of Rs 4,200–4,500 crore annually.

 

“Passenger car traffic accounts for roughly 35–40 per cent of toll operator revenue, though their share will be relatively higher on national highways around metro cities. Given the Government of India’s thrust on monetisation and attracting private sector investment in toll projects, ICRA expects adequate compensation for toll operators, thereby mitigating any material impact on their coverage metrics,” the agency said. 

However, it added that the modus operandi of the pay-out could result in a temporary receivable build-up in the interim. 

“Considering that commuters with limited intercity or highway movement as well as commercial taxi operators will not benefit from the annual pass, the impact on authority will be limited to 6–7 per cent of annual toll collection. In case toll operators are compensated fully by the authority, it could translate into an additional burden of Rs 4,200–4,500 crore annually for the authority,” ICRA said in its note.

 

The government rolled out an annual FASTag pass on 15 August, bringing major relief to highway users who had been complaining about high toll charges at plazas.

 

Applicable at around 1,150 toll plazas on national highways and expressways, the annual pass eliminates the need to frequently recharge FASTag through a one-time payment of Rs 3,000 for one year’s validity or 200 toll crossings. The pass applies to all non-commercial vehicles with a valid FASTag. Within four days of its launch, the facility had seen 500,000 registrations.

 

In a circular, the National Highways Authority of India (NHAI) said the amount of compensation for annual pass transactions would be calculated by multiplying the number of annual pass vehicles with the applicable user fee rates for cars, vans, and jeeps (non-commercial vehicles) at each plaza. In case of a return journey, the fee would be 1.5 times the user fee rate, it added.

 

In an interview with this paper in July, Zafar Khan, Vice-President, Highway Operators Association of India, said the government and concessionaires had been in consultations over a compensation formula, and the government was likely to provide it through a corpus.

 

The user fee collection agency shall deposit the adjusted remittance on account of the passes in accordance with the timelines and provisions defined in the existing contract agreement, and all transactions will be reconciled on a monthly basis, NHAI said.