NHAI To Compensate Private Highway Operators For “Annual Pass” Rollout

The National Highways Authority of India (NHAI) will come up with a framework to compensate private highways operators and investors for losses they will incur due to the “annual pass” rollout. This FASTag-based yearly pass will be priced at ₹3,000 and will be operational in the country from August 15 onwards. The government will compensate both overseas pension funds and those who have betted on the highway sector.

(Also Read: FASTag Annual Pass Explained: Who Can Use It, Where It Works, and How to Activate)

The annual pass will also reduce administrative complexity and user costs by consolidating multiple toll payments into a single annual transaction. While several highway contractors are collecting toll as per ongoing contracts, there has been some apprehensions among private investors. However, the Government will stick to its August 15 timeline according to reports Nitin Gadari (Minister of Road Transport & Highways) has already made the announcement.

In FY 23-24, toll revenue reached ₹55,000 crore out of which ₹8,000 crore came from private cars. Under the existing structure, NHAI has monetised highway projects based on three models – Toll Operate Transfer (TOT), infrastructure investment trusts (InvITs) and securitisation. Via which, in FY 24-25, the NHAI  achieved 71 per cent of the monetisation target in the highway sectors, by raising ₹1.20 lakh crore out of the targeted ₹1.60 lakh crore.  

(Also Read: How do you get FASTag without RC? : A Comprehensive Guide)

Several players are involved in the road infrastructure value chain. From Cobue Mobility and IRB Infrastructure, to the Adani Group. Even sovereign fund and asset managers like NIIF and Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board are on board here. The annual pass will take over a chunk of the income from all these companies that used to come from toll collection.

(Source: ETAuto)