House panel questions ‘perpetual' highway tolls, seeks removal after cost recovery

The Hindu

2 days ago

Tolls on national highways continuing in perpetuity should be reduced or scrapped once capital and maintenance costs are recovered, the Public Accounts Committee (PAC) recommended in its report tabled before Parliament on Tuesday (August 12, 2025). It also proposed a tariff authority for toll determination to ensure fairness.
The PAC, under the chairmanship of Congress MP K.C. Venugopal, has proposed a technology-driven, and transparent mechanism for automatic toll refund or waiver where highways are under maintenance or unfit.
'The committee desires that toll collection on any highway stretch must be rationalised and substantially reduced once capital and routine maintenance costs have been recovered. Any continuation of tolls beyond this point should be permitted only if clearly justified and approved by the proposed independent oversight authority,' the report recommends.
Such a mechanism will safeguard user interest and uphold the principle of equity in public infrastructure usage, it states.
Toll charges on National Highways have been based on rates set in 2008 with an annual 3% increase. The concept of perpetual tolling began with a 2008 amendment allowing toll collection to continue even after project costs are recovered. This was further formalised in the 2023 fee rules amendment, which explicitly permits tolling beyond the concession period. After a Build Operate Toll project's concession ends, the asset transfers to the National Highways Authority of India (NHAI) and operates as a publicly funded toll plaza, with revenues going to the Consolidated Fund of India.
Although toll rates are annually revised using a fixed increment combined with partial Wholesale Price Index adjustment, the committee notes there is no independent mechanism to assess if toll charges fairly reflect actual operation, maintenance costs, or future service needs.
The PAC has proposed that the Ministry of Road Transport and Highways (MoRTH) establish a tariff authority on the lines of the Airports Economic Regulatory Authority (AERA) in the civil aviation sector. 'This authority should be mandated to review and determine periodicity of toll revisions that are based on certain parameters,' it suggests. Such a move would also ensure transparency and fairness in toll fixation, collection, and regulation.
Calls for refund
It has also demanded that road users be refunded toll where road works are underway and users are unable to access highways as 'toll is meant to be charged only when the road is fully developed, safe, and usable as per approved standards. However, toll is being collected even when the road is incomplete or under expansion, or when lanes are closed due to ongoing widening, upgradation, or maintenance works. This implies that the road user is not getting the full benefit for which the toll is being paid.'
The PAC has also said that the MoRTH and the NHAI establish a technology-driven, and transparent mechanism for automatic toll refund or waiver in such cases, adding that such a system should be integrated with the electronic FASTag system.
On FASTag, the committee says though their adoption has been widespread, there is still congestion on highways because of failed readings by scanners at toll plazas, and recommended on-site facilities for users to recharge, purchase, or replace FASTags. It says effective toll management must also include real-time monitoring and data-driven decisions and therefore, the NHAI must develop a real-time toll plaza performance dashboard integrating live traffic flows, queue lengths, lane-wise usage, and estimated waiting times.