The National Highway Authority’s introduction of a Rs 3,000 FASTag annual pass for private vehicles aims to alleviate delays at toll plazas. However, a CRISIL report reveals a potential downside: a 4-8% reduction in revenue for toll road operators. This assessment, released on June 25, analyzed 40 operational toll road projects to evaluate the impact of the new pricing structure, slated to begin August 15, 2025. The annual pass, applicable to cars, vans, and jeeps, covers over 200 trips or one-year access on national highways and expressways. Travelers could save up to 80%, approximately Rs 55-65 per trip, compared to the current per-trip cost of Rs 70-80, if utilizing the pass for the maximum number of trips. The new compensation process will require consultations to finalize implementation, which could lead to delays in reimbursements to operators. However, CRISIL anticipates stable credit risk profiles for rated toll operators during this transition. The shift will also require toll operators to seek compensation from NHAI instead of direct collection at toll gates. Higher-than-expected adoption rates could lead to increased interim revenue losses, necessitating monitoring. The CRISIL assessment considered debt service coverage ratios and liquidity positions of the rated projects, finding that toll road operators generally maintain sufficient cash flow coverage throughout the transition period. According to Anand Kulkarni, Director, CRISIL Ratings, private vehicles constitute 35-40% of the overall traffic, but only 25-30% of the revenue. If a third of these vehicles purchase the annual pass, toll operators’ revenue will decline by 4-8%. Timely finalization and implementation of the compensation mechanism are crucial to maintain private sector confidence, which is critical to the sector’s growth.
