Electronic Toll Collection To Save Rs. 10 Bn Annually: CRISIL

The National Highways Authority of India proposes to replace manual toll collection at highway toll plazas with ETC (Electronic Toll Collection), a nationwide automated collection system.

CRISIL Research, India’s largest independent and integrated research house, expects this changeover to eliminate waiting time of vehicles and save fuel worth Rs 10 billion per year. The savings in fuel will far outweigh the initial cost of Rs 100 per vehicle that the system requires from vehicle owners.

“Currently, there are close to 525 toll plazas, operating on national and state highways in India. Over 20,000 vehicles cross these plazas daily, each queuing up for approximately 5-10 minutes awaiting their turn to pay the toll fare. Each vehicle consumes almost 0.5-1.0 litre of fuel in an hour. Collectively, these vehicles spend around 1,800-3,600 hours at toll plazas, which accounts for a daily wastage of Rs. 30-60 million and annually, Rs. 10 billion,” says Ajay D’souza, Head, CRISIL Research.

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The ETC system, based on radio frequency identification (RFID), comprises a wireless on-board unit (OBU) fitted into a vehicle and a stationary roadside unit (RSU) placed at the toll plaza. The OBU is, by design, compatible at toll stations across the country. The RSU can sense an OBU even as a vehicle moves at 50 km per hour, and automatically deduct toll from the owner’s pre-paid toll account with a central clearing-house. The automated collection promises to eliminate waiting time and ease congestion at toll plazas. The system is also equipped to detect defaults in toll collection which occur either due to insufficient funds in a toll account or a faulty OBU by activating an alarm to inform authorities, without stopping the flow in traffic.

“Apart from reducing fuel wastage, the ETC system can plug leakages in toll collection. Toll leakages occur when a vehicle does not pay the requisite toll or when booth operators underreport collections. Based on the current industry estimate of about 10 per cent leakage, annual losses for road developers are estimated to be approximately Rs 12 billion. An automated tolling system can effectively address this area of grave concern for road developers and lenders with exposure to road projects,” said Prasad Koparkar, Head, CRISIL Research.

The system will require the government to invest in two major system components to enable collections to flow to toll operators – a central database where the clearing-house will store account information, and networks that will connect toll plazas to the database. Revenues from tolled stretches will flow directly to the involved operators via the central clearing-house. The system is likely to come up in a phased manner, with pilot projects on dense highway stretches.