The Hindu Business Line : Govt approves new toll policy

New Delhi, Nov. 20 In a move to make national highway projects more attractive for the private sector, the Cabinet Committee of Economic Affairs (CCEA) has approved a new toll policy, which will allow operators to raise user charges on an annual basis.

The National Highways Fee (Determination of Rates and Collection) Rules, 2008, will also enable levying of toll on two-lane sections of national highway on which an investor has spent over Rs 1 crore a km on upgradation.

At present, several of the 60-odd highway projects lined up for bidding — with an estimated cost of Rs 50,000 crore — are not finding takers.

The Government expects that the new toll rules — which basically allows charging of higher toll rates from the users of National Highways against the present levels, apart from an annual hike – will make the projects more attractive for private players.

Inflation woes

Incidentally, just a few months ago, the Government appeared to be wary of giving its final nod to the new toll rules as it feared that higher toll charges will further fuel inflation. But now with worries over inflation giving way to concerns over sapping up of corporate investment sentiment, the situation seems to have become more conducive for approving the new toll rules.

In fact, sources say that earlier the Government had even toyed with the idea of reducing toll charges on national highways to tackle inflation. The new toll rules had been listed on the Cabinet agenda at least twice in the past few months but were not cleared.

The new toll policy rules propose increasing the toll charges each year by three per cent (simple interest), and will be also take into account the wholesale price index between two consecutive years.

The toll charges will be rounded off to the nearest multiple of Rs 5.

A more directly proportional linkage between the cost of construction of the structure (bridge, bypass or tunnels) and the toll rate has also been suggested.

In the current toll policy, only the length of the road stretch is taken into account while calculating the toll, irrespective of variable construction costs.

Light commercial vehicles, trucks, buses and multi-axle vehicles may have to pay steeper toll fees, while negotiating bridges, bypasses or tunnels.