Work in Progress: FASTag deployment witnesses greater uptake

FASTag deployment witnesses greater uptake

The central government has been quite ambitious when it comes to integrating advanced technologies with highway operations. Tolling has been a priority area for the government in the past few years and a nationwide electronic toll collection (ETC) programme has been launched with the aim of facilitating faster movement of traffic on highways. While the ETC deployment programme was slow to start, it has picked up pace in the past two years.

FASTag Programme: Progress report

According to the National Payments Corporation of India (NPCI), 2.63 million FASTags have been issued so far. This is a significant jump from the 0.41 million issued by April 2017. The extent of FASTag penetration has been quite impressive and stands at 25 per cent (in value terms) as of July 2018.

The FASTag programme is operational at 421 toll plazas across the country. As of July 2018, the average daily transaction at the toll plazas were  650,000, a substantial increase from an average daily transaction size of 240,000 in April 2017. The number of banks issuing FASTags increased from six in April 2017 to 21 in July 2018. This increase in FASTag issuance has been mainly on account of the Ministry of Road Transport and Highways’ (MoRTH) mandate to original equipment manufacturers to issue tags to vehicles applying for fitness certificates and national permits. Some of the banks associated with the programme are ICICI Bank, the State Bank of India (SBI), Axis Bank, Punjab National Bank (PNB) and IDFC Bank. As of July 2018, ICICI Bank topped the list with a share of about 30 per cent, followed by Paytm and Axis Bank.

The transaction volume of FASTags has also gone up substantially. About 221.21 million transactions took place between April 2017 and July 2018. Not only does ICICI Bank have the highest tag issuance share, but also contributed about 76 per cent of the transaction volume. It was followed by SBI and Axis Bank. The value generated by the transaction volume in the past 18 months totalled about Rs 57 billion. A bank-wise business summary reflects that 70 per cent of transaction value was contributed by ICICI Bank, followed by SBI and Axis Bank. While ICICI Bank is way ahead in terms of numbers, it is gradually losing share to Paytm on account of the rise in competition. With regard to the vehicle class, multi-axle vehicles, trucks and buses accounted for about 24 per cent of total tags issued and accounted for 64 per cent of the total number of transactions. While over 66 per cent of the tags were issued to cars/jeeps/vans, these contributed just about 11 per cent in the total transaction count. This is because state and city toll plazas have not yet been covered under this programme.

Efficiency performance under FASTag has improved considerably in the past few months. Of the total transactions, 50 per cent are processed within 15 minutes now as compared to 36 per cent processed during the fourth quarter of 2017-18. Meanwhile, about 73 per cent of the transactions are now processed within 30 minutes as compared to 62 per cent during the fourth quarter of 2017-18.

Making FASTag accessible

The National Highways Authority of India (NHAI) launched two mobile apps – MyFASTag and FASTag Partner – in order to facilitate the availability of FASTags for ETC. The FASTag Partner App will enable more than 6,000 dealers in the country to access a single platform and activate the FASTag at the time of delivery of the vehicle.

Dispute resolution under FASTag

Of the disputes raised at toll plazas in 2018-19 (till July 2018), about 45 per cent were under the reason “duplicate transaction done at toll plaza” and about 25 per cent of the disputes were raised for “toll fare calculation error”. Charge backs under “vehicle was in low balance list” have decreased to 9 per cent in 2018-19 against 91 per cent in 2016-17. This is where the National Payments Corporation of India’s (NPCI) role as the clearing house for all payments assumes importance. The NPCI has been working with NHAI and the concessionaires to settle these disputes. This is well reflected in the reduction in disputed transactions from 1.34 per cent of all transactions in 2017-18 to 0.22 per cent in 2018-19 (till July 2018). Disputes can further be reduced if applications such as an Interface Control Document [ICD] 2.4,  ICD 2.5 (Application Programme Interface [API] specs) are implemented.

Pay-as–you-use tolling

Announced in Union Budget 2018-19, pay-as-you-use is India’s first GPS-based tolling system. It enables users to pay only a specific amount based on the distance that they travel as opposed to the fixed fee that they have been paying till now. This fully automated system will allow automatic deduction of toll for FASTag-

fitted vehicles. After the deduction of toll, the gates will open automatically. The toll amount will be deducted from the vehicle owner’s account and credited to the account of the concessionaire within a day. This technology will be pilot tested on the Delhi-Mumbai corridor for a year to assess its feasibility.

NHAI has also been actively looking at alternative ETC technologies. One such technology is smart cards with on-board units (OBUs), which allows the user to punch in the smart cards and zip through the toll plaza. While there is flexibility in the payment mechanism associated with this technology, high costs associated with OBUs can make it very expensive.

Another noteworthy technology involves the recognition of licence number plates and allows for toll deduction automatically. This technology is being currently deployed in some of the advanced economies around the globe. It offers flexibility in the payment mechanism and is linked to the user’s account. However, the technology requires substantial investments in high resolution cameras which makes it costly to deploy. It also necessitates the use of image storage devices. Besides, global navigation satellite system and GPS can be used to calculate the toll charge. This allows for free flow lanes and eliminates heavy investments in toll-related infrastructure. However, the GPS unit is expensive and enforcement of this technology is a challenge.

The road ahead: Journey towards “One Nation, One FASTag”

Undoubtedly, the implementation of one dedicated FASTag lane across all national highways in the country will revolutionise the transport industry. However, smooth implementation of this requires a robust data storage and ICT software/hardware that forms the backbone of this system.

FASTag is envisioned to be integrated with state toll plazas, city toll plazas, parking, fuel payments, vehicle-linked fines as well as smart city initiatives. All these efforts are aimed towards enhancing customer convenience. However, there are various challenges involved such as making the technology barrier free, managing default risks, integrating it with the current plaza infrastructure, working out point-based concession agreements, mitigating high cost of OBUs and developing tamper-proof devices. Further, there are practical problems that NHAI is encountering in terms of land acquisition and extending lanes.

In order to support its vision of “One Nation, One FASTag”, the government’s future roadmap entails the integration of FASTag with VAHAN and GSTN and API Plaza transactions processing. w

With inputs from a presentation by Denny V. Thomas, Assistant Vice President, NPCI, at a recent India Infrastructure conference