NHAI Cuts Toll Collection Costs By Over Rs 2,000 Crore Through Reforms And Better Contract Management

The National Highways Authority of India (NHAI) has achieved substantial cost savings of Rs 2,062 crore in toll collection operations at public-funded toll plazas during FY 2024–25, reflecting a major improvement in operational efficiency and financial management.

According to official figures, the cost of toll collection has dropped sharply from Rs 4,736 crore in FY 2023–24 to Rs 2,674 crore in FY 2024–25. This marks a decline in collection costs from 17.27 per cent to 9.27 per cent of total toll revenues within a year.

The ‘cost of toll collection’ represents the difference between the toll fee collected by agencies and the amount actually remitted to NHAI.

In FY 2023–24, toll agencies collected Rs 27,417 crore, remitting Rs 22,681 crore to NHAI. In the following year, the figure rose to Rs 28,823 crore, of which Rs 26,149 crore reached the authority, demonstrating higher efficiency and improved revenue remittance despite greater overall collection.

Officials attributed the savings to a series of reform measures, including close monitoring of toll contracts, removal of the three-month deemed extension clause, timely bidding processes, and prioritisation of one-year contracts over short-term three-month ones. These steps curtailed leakages and enhanced transparency.

NHAI also limited premature termination requests to three per financial year and barred contractors who had sought such terminations from rebidding for the same plaza.

To ensure fair participation, the authority engaged regularly with the All India User Fee Collection Federation to resolve operational challenges and build industry confidence.

The timely release of performance securities and bank guarantees further strengthened the financial capacity of toll agencies, leading to more competitive bids.

Additionally, a ‘Windfall Gain’ clause was introduced to prevent excessive profits allowing NHAI to terminate contracts if toll collections exceed 40 per cent of the agreed remittance over a 15-day average.

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