FASTag Annual Pass: Vehicle owners benefit and toll operators suffer losses, Crisil warns

FASTag Annual Pass: The Fastag Annual Pass scheme will be applicable for private vehicles from August 15, 2025, which will save up to 80% toll for passengers. However, this may reduce the revenue of toll operators by 4-8%. Crisil says that it will be necessary to implement a timely compensation mechanism so that the revenue loss can be compensated. Due to NHAI's strong payment record and adequate cash flow, the credit profile of toll operators remains stable for the time being.

FASTag Annual Pass: The Government of India has announced the Fastag annual pass for private vehicles (cars, vans, jeeps) from August 15, 2025. This pass will be available at a price of Rs 3,000 and will be valid for 200 trips or one year (whichever is earlier). The scheme will be applicable on National Highways and National Expressways and will bring huge savings to passengers traveling regularly. But, rating agency Crisil Ratings has warned that this move of the government may lead to a decline in the earnings of private toll operators.

Passengers will get the benefit of huge savings

Currently, a private vehicle pays an average of Rs 70-80 per trip toll fee. If the annual pass is fully utilised, then up to 80% savings of about Rs 55-65 per trip is possible. This will be extremely beneficial for those passengers who frequently pass through toll roads.

Toll operators will suffer revenue loss

However, this new scheme may affect the revenue of private toll operators by 4-8%. According to Crisil Ratings, currently 35-40% of the total toll traffic is of private vehicles, which contribute 25-30% in terms of revenue. If one-third of them buy annual passes, then there may be a sharp decline in toll collection.

Timely compensation mechanism necessary

Crisil believes that it will be necessary to finalize a timely and clear compensation framework to compensate for this potential revenue loss. If there is a delay in this, it may affect the cash flow and debt repayment ability of toll operators. However, the credit risk profile is currently stable, as most toll projects have adequate cash reserves.

Role and track record of NHAI

The report released by Crisil Ratings states that the responsibility of paying compensation will be of the National Highways Authority of India (NHAI). NHAI's payment track record in annuity model projects has been positive so far, which limits counterparty risk.

Can increasing popularity increase concern?

The report says that if the annual pass is adopted more than expected, it may lead to more interim revenue loss. Therefore, it will be necessary to keep a constant watch on it. The Crisil report says that even if the compensation is received six months late, there will be limited impact on DSCR (Debt Service Coverage Ratio).

Balanced benefits and risks

While the Fastag annual pass will provide a huge economic benefit to commuters, it can also pose an economic and operational challenge for toll operators. The success of this change will depend on how quickly and clearly the compensation process is implemented.

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