Move prompted by evidence that consumers are using alternative routes to save costs
National Highways Authority of India (NHAI) is working on a proposal to scrap the 30 to 35 per cent premium on toll charged on highways that bypass cities.
NHAI has also suggested that the extra toll that private concessionaires charge for roads on which they have spent between Rs 50 crore and Rs 100 crore should be scrapped. Currently, no toll is charged on roads that cost less than Rs 50 crore to upgrade or construct.
The move will significantly reduce transport costs. For example, a truck travelling from New Delhi to Mumbai has to pay Rs 1,000 if it uses the five bypasses en route. If the new scheme is approved, the toll will fall by around Rs 300.
The move to lower or selectively scrap toll has been prompted by growing evidence that consumers are using alternative routes like the newly constructed rural roads to save high toll tariffs. As a result, private concessionaires, who are critical to the expansion of India's highway projects, find their returns on investment hit by traffic flows that are significantly below projections.
Reducing toll to boost traffic flow, therefore, is one solution to the problem. It is not, however, clear whether concessionaires have to be given compensation for a reduction in tariffs or whether they will be compensated by higher traffic volumes.
Construction companies are, however, unhappy with the proposal. "Instead of decreasing the toll, the government should work on increasing the volume of traffic," said M Murli, director general, National Highway Builders Federation, which represents highway construction companies
"This mid-term change will adversely impact both current and future road projects. We will, however, agree to the new toll regime if we are compensated by the government," he added.
