The National Highways Authority of India (NHAI) is set to establish a compensation framework for private highway operators and investors who face potential losses following the launch of the "annual pass" scheme for private vehicles on national highways and expressways, scheduled to begin on August 15, 2025. This move is particularly crucial, given the highway sector's strong performance in the government's monetization program and its continued importance over the next five years.
According to sources within the road transport ministry, a committee will be formed to develop this framework within a month, after consulting with various stakeholders. The highway sector has attracted significant investment from both domestic and international players, including companies like Cube Mobility and IRB Infrastructure, as well as the Adani Group. Sovereign wealth funds and asset managers such as NIIF, Canada Pension Plan Investment Board, and Ontario Teachers' Pension Plan Board have also made substantial investments. Additionally, numerous NH stretches are currently managed by private highway builders who collect tolls based on existing contracts.
One of the primary concerns among private investors, particularly those involved in completed projects under the monetization program, revolves around potential revenue losses. These investors have made upfront payments based on projected traffic and toll revenue. To address these concerns and ensure the interests of all stakeholders, especially highway users, the government is committed to the August 15 timeline for the annual pass scheme.
The NHAI has been monetizing its projects through various models, including Toll Operate Transfer (TOT), infrastructure investment trusts (InvITs), and securitization. Officials have stated that the annual pass scheme has been in development for several months, and all potential implications have been thoroughly analyzed using historical toll collection data. The data indicates that NHAI has already achieved 71% of its monetization target in the highway sector, raising ₹1.2 lakh crore out of the targeted amount.
The proposed FASTag Annual Toll Pass aims to replace the current toll payment system, where users pay each time they cross a toll booth. Under the new system, private vehicle owners can opt for an annual pass, allowing them to travel across national highways and expressways without recurring deductions. This initiative aims to reduce congestion, promote digital payments, and simplify the travel experience. The key proposal involves a flat annual payment of ₹3,000, granting car owners unlimited access to national and state expressways. This eliminates the need to frequently reload FASTag accounts or track individual toll deductions, benefiting frequent road travelers, including daily commuters and commercial vehicle operators.
For occasional highway users, a second model is under consideration: a distance-based toll of ₹50 per 100 kilometers. This option is designed to avoid asking infrequent users to pay a flat annual fee that may not align with their travel habits, enabling them to pay only for their actual highway usage. This scalable tolling model aims to accommodate both frequent and occasional users.
The introduction of the FASTag Annual Toll Pass is not without its challenges. A critical aspect of this transition is ensuring that highway operators and investors do not suffer financial losses due to the shift in toll collection methods. The compensation framework being developed by the NHAI is intended to address these concerns, ensuring a balanced approach that benefits both commuters and the companies that have invested in the highway infrastructure.
