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NHAI Saves Rs 2,062 Crore: How Toll Collection Costs Dropped 46%

The National Highways Authority of India achieved massive savings in toll collection costs this fiscal year. Through careful contract management and strategic reforms, they reduced expenses by nearly half. These measures included minimizing short-term contracts and introducing windfall gain clauses. The efficiency gains mean more funds can be redirected to highway development projects across the country.

Key Points: NHAI Saves Rs 2062 Crore in Toll Collection Costs FY2025

  • Cost of toll collection dropped from Rs 4,736 crore to Rs 2,674 crore year-on-year
  • Percentage savings reached 46% through strategic contract management reforms
  • NHAI minimized short-term contracts and eliminated three-month extensions
  • Windfall gain clause introduced to prevent excessive contractor profits
2 min read

Saved Rs 2,062 crore in cost of toll collection in FY2024-25: NHAI

National Highways Authority saves Rs 2,062 crore as toll collection costs drop from 17.27% to 9.27% through strategic contract reforms and efficiency measures.

"The savings in cost of toll collection had resulted primarily due to various initiatives taken by NHAI - Ministry of Road Transport and Highways"

New Delhi, Oct 30

The cost of toll collection came down from Rs 4,736 crore in FY 2023-24 to Rs 2,674 crore in FY 2024-25, resulting in savings of Rs 2,062 crore for NHAI, the Ministry of Road Transport and Highways said on Thursday.

In percentage terms, the cost of toll collection decreased from 17.27 per cent in FY 2023-24 to 9.27 per cent in FY 2024-25.

The 'cost of toll collection' is the difference between the Toll Fee collected by the tolling agencies and the amount remitted to NHAI at public-funded toll plazas.

In FY 2023-24, total toll collected by the toll agencies amounted to Rs 27,417 crore, out of which about Rs 22,681 crore were remitted to NHAI.

However, in FY 2024-25 the toll agencies collected a total of about Rs 28,823 crore as toll fee, out of which around Rs. 26,149 crore were remitted to NHAI.

The savings in cost of toll collection had resulted primarily due to various initiatives taken by NHAI like close monitoring of current contracts, deletion of provision for deemed extension of three months, timely bidding, ensuring the maximum contracts for one-year duration are awarded and short-term contracts of three months are minimised.

Moreover, measures were taken to drastically reduce short term three-month contracts, limiting only three premature termination requests during a financial year and restricting the same contractor in the bidding of toll plaza, for which he has submitted the premature termination request.

Also, NHAI has been regularly engaging with the 'All India User Fee Collection Federation' to address issues and challenges faced by the toll collection agencies to build confidence and increase participation in toll bids.

According to a ministry statement, timely release of performance security (cash part) and bank guarantees of the toll collection agencies further enhanced their bidding capabilities resulting into higher bids amounts.

Apart from this, to avoid any windfall gains to the toll collection agencies, a 'Windfall Gain' clause was also introduced in the agreements, under which the contract of the toll collection agency can be terminated if the moving average of toll collection in last 15 days is more than 40 per cent of the remittance paid to NHAI.

- IANS

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Reader Comments

R
Rohit P
The 'Windfall Gain' clause is a smart move to prevent exploitation. But I hope this doesn't lead to toll operators cutting corners on service quality. We still face long queues at many toll plazas during peak hours.
D
David E
Impressive cost reduction from 17.27% to 9.27%! As someone who frequently travels between Delhi and Mumbai, I've noticed faster processing at toll plazas. The digital payments and FASTag system seem to be working well. 👍
A
Ananya R
While the savings are commendable, I'm concerned about whether these cost cuts will affect employment at toll plazas. Many families depend on these jobs. Hope NHAI has considered the human aspect too.
V
Vikram M
Excellent work by NHAI! The monitoring of contracts and reducing short-term agreements shows proper governance. Now if they could just fix the Mumbai-Pune expressway toll rates, that would be perfect! 😊
S
Sarah B
As an expat living in India, I must say the improvement in highway infrastructure is remarkable. These savings should ideally lead to better road safety measures and more rest stops for long-distance travelers.

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