NHAI to partner banks for e-payment of toll

Roll out of e-tolling will happen soon

The National Highways Authority of India (NHAI) is in talks with leading banks, including ICICI Bank, to partner it for electronic collection of toll across highways. A proposed service agreement would ensure banks collect the tolls and distribute the funds  to various concessionaires.

The move to expedite e-tolling comes at a time when highway operators have been facing agitation by political parties at toll gates. Since January, toll gates in Maharashtra have been under attack by the Maharashtra Navanirman Sena. Such attacks, among other factors, have forced many private developers to refrain from partnering the government in road construction.

“We have been holding talks with banks and we are looking to do this as fast as we can,” said a senior NHAI official. “Electronic tolling is the way forward. Sometime ago, we had floated a company to look after this.... There have been rising attacks on toll gates and this move will help curb some of the concerns.”

Earlier, NHAI had set up Indian Highway Management Company Ltd and invested Rs 30 crore for a 25 per cent stake in the venture. While another 25 per cent stake is held by lenders to various projects, the remaining 50 per cent is held by concessionaires. Currently, there are 22 concessionaires in the company. NHAI plans to play the role of a facilitator for e-tolling.

In e-tolling, the toll is collected through a radio frequency identification device (RIFD) chip-embedded on vehicles; these chips help deduct money at toll plazas automatically. In some cases, NHAI was forced to remove toll gates due to inconvenience to commuters.

Though the government started work on e-tolling project about 10 years ago, not much progress was seen until 2010. Last year, India’s first interoperable RIFD-based electronic toll system was rolled out on the Ahmedabad-Mumbai national highway, on a pilot basis.

In November 2013, a report published by ICRA said, “The road sector continued to face headwinds in the form of execution impediments, financing constraints, slowdown in traffic and stressed financial position of the developers. Several projects have faced delays in execution... As a result, execution in NHAI projects saw a decline in the first four months of this financial year. Many projects awarded through the last two years had been facing difficulty in achieving financial closure due to aggressive bidding, uncertainty on land acquisition, pending approvals and increased risk aversion of banks. As of August 2013, 32 road projects didn’t achieve financial closure.”

India has about 525 toll plazas.

ALSO READ: Raj Thackeray detained, freed as MNS attacks toll booths

ALSO READ: India's first electronic toll collection system launched