NHAI Achieves Major Milestone by Cutting Toll Collection Costs by ₹20.62 Billion in FY2024–25

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Key Highlights:

• ₹20.62 billion reduction in toll collection costs.

• Collection cost share dropped from 17.27% to 9.27%.

• Total revenue increased to ₹288.23 billion in FY2024–25.

• New contract rules and ‘Windfall Gain’ clause introduced.

• Improved transparency and liquidity for toll operators.

The National Highways Authority of India (NHAI) has made remarkable progress in improving tolling efficiency and transparency. During the financial year 2024–25, NHAI successfully reduced toll collection costs at public-funded toll plazas by ₹20.62 billion. The total cost dropped from ₹47.36 billion in FY2023–24 to ₹26.74 billion in FY2024–25, a sharp 44% reduction.

This improvement also lowered collection costs as a share of total toll revenue from 17.27% to just 9.27%, showing a strong rise in operational efficiency across India’s highway network.

Growth in Toll Revenue and Remittances

The reforms not only reduced costs but also helped increase toll revenue.

• In FY2023–24, toll agencies collected ₹274.17 billion, with ₹226.81 billion remitted to NHAI.

• In FY2024–25, total collections rose to ₹288.23 billion, while remittances to NHAI jumped to ₹261.49 billion.

This steady growth shows the success of NHAI’s new strategies and stronger monitoring of toll collection activities.

Key Reforms Behind the Success

Better Contract Management

NHAI introduced major reforms in contract handling, which played a key role in achieving these results. The authority removed the three-month deemed extension clause, ensured timely tendering, and awarded most contracts for one-year durations. This helped in maintaining efficiency and avoiding unnecessary delays.

Fewer Premature Terminations

To ensure stability, NHAI limited premature contract terminations to a maximum of three per financial year. Contractors who ended their agreements early were also barred from rebidding at the same toll plaza, helping maintain discipline and consistency in operations.

Regular Industry Consultations

NHAI held regular meetings with the All India User Fee Collection Federation to discuss challenges and build trust among toll operators. By ensuring faster release of performance securities and bank guarantees, the authority improved liquidity, allowing contractors to bid more competitively and confidently.

Introduction of the ‘Windfall Gain’ Clause

To maintain fairness and transparency, NHAI introduced a ‘Windfall Gain’ clause. Under this rule, if the 15-day moving average of toll collections exceeds 40% of the remittance paid to NHAI, the contract can be terminated. This prevents excessive profits and ensures that toll operations remain balanced and ethical.

Future Outlook

With reduced collection costs, improved contract management, and better engagement with the industry, NHAI is set to further enhance toll operations across India. These reforms are expected to strengthen revenue efficiency, promote transparency, and ensure smoother highway operations in the coming years.

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CMV360 Says

NHAI’s strong reforms and digital monitoring have set new standards in toll management. By reducing collection costs by ₹20.62 billion and increasing revenue remittances, the authority has improved efficiency, trust, and transparency. These efforts are paving the way for a more reliable, transparent, and financially sound tolling system across India’s national highways.