ETC Focus: FASTag deployment gains momentum

FASTag deployment gains momentum

In order to remove traffic bottlenecks at toll plazas and ensure the seamless movement of vehicles and the hassle-free collection of toll, the Ministry of Road Transport and Highways (MoRTH) is in the process of deploying radio frequency identification (RFID)-based electronic toll collection (ETC) systems across the country. ETC deployment has progressed at a swift pace in recent years, subsequent to the incorporation of Indian Highways Management Company Limited (IHMCL) in December 2012.

The company was formed to aid the pan-Indian deployment of the RFID-based ETC systems on national highways. In September 2014, IHMCL and Axis Bank signed an agreement for the provision of central clearing house (CCH) services for deploying ETC systems on toll plazas. Prior to this, in February 2014, IHMCL had signed a similar agreement with ICICI Bank. In the same year, the MoRTH decided to launch the ETC programme for national highways under the brand name FASTag. FASTag is a simple-to-use, reloadable tag which enables the automatic deduction of toll charges and allows vehicles to pass through toll plazas without having to stop for cash transactions.

While ETC deployment commenced in December 2014, full-scale implementation of the programme has picked up only in the past few months. As of November 2016, 347 toll plazas (of a total of 366) on national highways across the country were integrated with the CCH and made operational for ETC transactions. In April 2016, only about 1,100 FASTags were sold. The number was 10,000 in June 2016 and jumped exponentially to 178,266 in December 2016. As a result, the transaction value of the tags sold increased from Rs 3.5 million in April 2016 to about Rs 470 million in December 2016.

Demonetisation proved to be a positive externality for the ETC segment since electronic tolling was facilitated in a big way as a result of the cash crunch. After the initial suspension of toll collection in November 2016, tolling was resumed on December 3, 2016 and elaborate arrangements were made for payment of fees through swipe machines, e-wallets and FASTags at all toll plazas on national highways. Collection through electronic means was just about 5 per cent during October-November 2016 but rose to about 11 per cent by mid-December 2016.

The ETC segment is expected to witness greater traction with more banks partnering with the National Highways Authority of India (NHAI). While initially IHMCL partnered only with ICICI Bank and Axis Bank to sell e-toll tags and the tag recharge option, now Paytm, Punjab National Bank, the State Bank of India (SBI) and IDFC Bank have also been roped in. NHAI has also approached the National Payments Corporation of India (NPCI) to set up an interbank clearing house to enable e-tolling across all toll plazas.

In December 2016, SBI partnered with Bhopal-based skill development firm AISECT for the national roll-out of ETC systems. AISECT will also be responsible for the countrywide sale and recharge of SBI’s prepaid account FASTag through AISECT-SBI banking kiosks. AISECT is planning to start the roll-out process soon and has decided to fix the cost of the SBI FASTag at Rs 150. Besides, a 10 per cent discount will be applicable for payments made through FASTags. The NPCI will run this initiative and will be responsible for payment settlement with the various banks involved in the ETC project.

The road ahead

According to a study by the Transport Corporation of India and the Indian Institute of Management Calcutta, the implementation of a pan-Indian ETC system on national highways could translate into savings of Rs 870 billion. Further, NHAI is in the process of introducing advanced toll management systems on national highways through the use of automatic traffic and vehicle counters and classifiers, CCTV surveillance, weigh-in-motion equipment and static weighbridges. This will help improve vehicular flow as well as transfer real-time traffic data to road operators. In order to provide users vital and transparent information about national highways and expressways, including applicable user fees at toll plazas, a web portal with national highway toll information,, has been launched. The GIS-based portal facilitates easy search for toll booths on the national map. In conclusion, the roll-out of ETC will certainly change the way traffic moves on national highways. This will not only make toll collection more transparent but also enhance operational efficiency for both NHAI and private operators.