Radio tag-enabled electronic toll system likely by March 2016

Indian Highways Management Company Ltd set up to implement e-toll collection on a pan-India basis.

If all goes according to plan, you may soon be able to zip through congested toll plazas on highways.

The Centre plans to implement radio tag-enabled electronic toll collection (ETC) systems across all highways by March 2016 and has decided to make ETC lanes as a mandatory clause in the new highway building contracts. (HT Photo)

The Centre plans to implement radio tag-enabled electronic toll collection (ETC) systems across all highways by March 2016 and has decided to make ETC lanes as a mandatory clause in the new highway building contracts.

A new company — Indian Highways Management Company Limited — has been set up. The National Highways Authority of India (NHAI) holds 25% stake in the company, with financial institutions and concessionaire or highway developers holding 25% and 50%, respectively.

“This company will be mandated to implement ETC on a pan-India basis. The target is to roll out e-tolling on all national highways by March 31, 2016,” a source, who did not wish to be identified, told HT.

Under the e-tolling system, in operation in stretches such as Delhi-Mumbai and Chennai-Bangalore, a radio frequency identification tag (RFID) tag is fixed on a vehicle’s windscreen. These tags can be obtained from designated banks and toll plazas.

Once the vehicle approaches the toll plaza, a sensor will detect the RFID tag, deduct the amount from a pre-paid account similar to a mobile wallet, and let the car pass through a dedicate e-toll lane.

The Centre has also launched a “hybrid” annuity model (HAM) to fund road projects to aid economic revival by creating jobs and pushing income growth.

The NDA government has set a target to build 30-km of new national highways every day.

Prime Minister Narendra Modi recently reviewed the progress of India’s highway projects.

Under HAM, the government will pay 40% of the project cost to the developer during construction, and the developer will pay the balance. The NHAI will collect the toll and refund 60% of the developer’s cost over a 10-year period.

The government has identified 21 highway projects to be implemented through this financing model. Three of these: Delhi-Meerut, Meerut-Bulandshahr and Shimla-Solan have already been bid out, sources said.

This funding system reduces the developer’s burden during construction, and also eases the NHAI’s cash problem in case of a fully government-funded project.

A new “monetisation” scheme has also been finalised, under which investors will be given the right to collect user fee or toll on a selected public-funded highway stretch against an upfront lump-sum payment to the government.

“The model concession agreement has been prepared for this,” another source said.