The introduction of the Rs 3,000 FASTag annual pass for private vehicles by the National Highway Authority aims to reduce congestion at toll plazas. A recent CRISIL report highlights the potential financial repercussions for toll operators. The report indicates that toll road operators’ revenue could decrease by 4-8% due to the new pass, effective from August 15, 2025. The analysis encompassed 40 active toll road projects, evaluating the implications of the new pricing structure. The annual pass is designed for private vehicles, including cars, vans, and jeeps, providing access for either over 200 trips or one year of use on national highways and expressways. Drivers can save a significant amount, potentially up to 80%, or approximately Rs 55-65 per trip, compared to the current per-trip costs of Rs 70-80, if utilizing the pass to its full extent. The shift to a new compensation process introduces a need for stakeholder consultation and finalization of implementation details, which could lead to delays in reimbursement to operators. Despite this, CRISIL anticipates that the credit risk profiles of rated toll operators will remain stable during the transition. The new system presents a challenge as toll operators will need to be compensated by NHAI instead of collecting fees at toll gates. CRISIL also indicates that a higher uptake of these passes than anticipated could lead to greater revenue losses that will need to be monitored. The assessment by CRISIL covered debt coverage service ratios and liquidity positions of rated Toll Road projects, with Toll road operators appearing to maintain sufficient cash flow coverage to handle the transition period. Anand Kulkarni, Director, CRISIL Ratings, observed that private vehicles constitute 35-40% of the traffic, while accounting for only 25-30% of the total revenue. A decline in revenue ranging from 4-8% underscores the necessity for a well-defined and timely compensation mechanism.
