‘A regime of perpetual tolling': Public Accounts Committee flags current tolling system, recommends creation of AERA-like tariff authority to ensure fairness
The committee said the practice was formalised by a 2008 amendment to the Fee Rules allowing for 'perpetual tolling' even after project costs are recovered. While toll rates are revised annually based on a fixed 3 per cent increment and Wholesale Price Index (WPI) adjustments, there is no independent mechanism to assess if these charges are justified by actual operation and maintenance costs, the committee said.
'…the Committee observe that the concept of tolling in perpetuity was first introduced through an amendment to the Fee Rules in 2008, allowing continued collection of user fees even after the recovery of project costs. This provision was further clarified and codified through the 2023 amendment to the Fee Rules, which explicitly permits tolling to continue beyond the end of the concession period, thereby formalising a regime of perpetual tolling,' said the Public Accounts Committee (PAC) in its report submitted to the Parliament on Tuesday.
According to the report, the Ministry of Road Transport and Highways (MoRTH) acknowledged this, adding it has initiated a study with NITI Aayog to revise the user fee determination framework, including base rates, inflation indexing, and concession structures.
Creation of new tariff authority recommended
The PAC further recommended that the ministry should establish a tariff authority, on the lines of the Airports Economic Regulatory Authority (AERA) in the civil aviation sector, to ensure transparency and fairness in toll fixation, collection, and regulation.
'This authority should be mandated to review and determine the periodicity of toll revisions based on certain parameters…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,' said the committee.
The PAC also said that all existing contracts and publicly funded toll plazas allowing tolling beyond cost recovery must be reviewed to safeguard user interest and uphold the principle of equity in public infrastructure usage. It said that while higher toll charges are justified during the period of concession agreement, continuation after that needs to be justified.
Recommendation for refunds, waiver where highways are incomplete
The committee also raised the concerns over the cases where tolls continue to be collected even in situations where the essential service — namely, safe, uninterrupted, and timely travel — is not available. This includes highway stretches that are incomplete, under prolonged construction, or marked by serious deficiencies in safety and traffic flow.
It recommended that MoRTH and National Highways Authority of India (NHAI) should establish a system for automatic toll refund or waiver in cases where the highway is incomplete, unfit, or unavailable fully or under maintenance for use.
'The Committee are particularly concerned by the absence of any institutional mechanism for refunding or waiving toll in such cases, despite the service not being rendered. Charging toll under these conditions not only violates the principle of quid pro quo but also undermines public confidence in the legitimacy of user charges,' said the committee.
The data available with the ministry shows that a total of Rs. 61,408 crore was collected as user fees or toll charges in the financial year 2024-25. In 2023-24, the total user fee collection was Rs. 55,882 crore. Similarly, a total of Rs. 48,032 crore in 2022-23, Rs. 33,929 crore in 2021-22 and Rs. 27,927 crore in 2020-21 was collected as user fee.
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