Why perpetual toll? Parliamentary panel questions collection of highway tolls even after project costs are recovered

A parliamentary panel has raised concerns over the continued collection of tolls on national highways even after project costs are recovered. The Public Accounts Committee (PAC) highlighted that current practices allow tolls to rise annually by 3%, regardless of highway quality, traffic levels, or affordability for users, a TOI report stated.

The PAC, headed by Congress MP K C Venugopal, recommended a rationalisation and substantial reduction in toll charges on such stretches. The committee also suggested setting up a “tariff authority” for toll fixation. It said, "Any continuation of tolls beyond this point should be permitted only if clearly justified and approved by the proposed independent oversight authority."

Proposal for independent toll oversight

The panel recommended that the road transport ministry establish a regulatory authority on the lines of the Airports Economic Regulatory Authority (AERA). The authority would ensure transparency and fairness in toll fixation, collection, and regulation. It would also be tasked with reviewing and determining the periodicity of toll revisions based on set parameters.

Ministry response and ongoing study

Responding to the PAC’s observation that there is no institutional mechanism to independently evaluate toll charges against actual operation, maintenance costs, or future service needs, the ministry said it has initiated a study with NITI Aayog. This study aims to revise the framework for user fees, including base rates, inflation indexing, and concession structures.

As per the PAC report, the ministry has requested NITI Aayog to conduct the study in collaboration with IITs and IIMs.

Review of existing contracts

The panel also called for a review of all existing contracts and publicly funded toll plazas that continue tolling beyond cost recovery periods. The PAC emphasised that while higher tolls may be justified during the concession period, continued collection afterwards must have clear justification to protect user interest and uphold equity principles.