Fast Forward

FASTag deployment gains momentum

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 nation-wide electronic toll collection (ETC) programme was launched with the aim of facilitating faster movement of traffic on highways.

Indian Infrastructure takes a look at developments in the ETC space…

FASTag programme: The journey so far

The ETC programme, the flagship initiative of the Ministry of Road Transport and Highways (MoRTH), was rolled out in April 2016. Indian Highways Management Company Limited (IHMCL) was constituted as the implementing agency for ETC, with the National Payment Corporation of India (NPCI) functioning as the central clearing house. In August 2017, the MoRTH issued a gazette notification according to which all four-wheel motor vehicles sold on or after December 1, 2017, will have FASTags fitted on them by the vehicle manufacturer or its authorised dealer, as the case may be. On September 1, 2017, the National Highways Authority of India (NHAI) achieved its first milestone in ETC by operationalising one dedicated FASTag lane at each toll. The ministry had initially proposed to make FASTag mandatory on national highways by December 1, 2019. However, the deadline was extended to December 15, 2019. Despite FASTag being made mandatory, one lane at each toll plaza has been dedicated as a hybrid lane, which will accept cash payments as well. Currently, the MoRTH has decided to relax the conditions regarding declaration of FASTag fee lanes for 30 days from January 15, 2020 at 65 identified high-cash transaction fee plazas of NHAI. The concerned fee plazas have been allowed to convert up to 25 per cent of all fee lanes to hybrid (cash plus FASTag) lanes during this time. The move comes in the wake of NHAI raising concerns regarding high cash transactions on its 65 identified fee plazas. Besides, in October 2019, an MoU was signed between IHMCL and GST Network (GSTN) for integrating the e-way bill system with FASTag. This has been done with a view to overcoming the existing challenge in the track-and-trace mechanism for the GST e-way bill system and enhancing the efficiency in its monitoring.

Progress under ETC implementation

According to the NPCI, 11.67 million FASTags have been issued as of December 31, 2019. This is a significant jump from the 0.41 million issued by March 31, 2017. The extent of FASTag penetration has been quite impressive and stands at 29 per cent (in value terms) as of October 2019.

More than 528 toll plazas across the country have been equipped with FASTag. In 2019-20 (up to November 1, 2019), the number of FASTag transactions at the toll plazas stood at 294.87 million, a substantial increase from the transaction size of 127.04 million in 2017-18. This increase in FASTag issuance has been mainly on account of the MoRTH’s mandate to original equipment manufacturers to issue tags to vehicles applying for fitness certificates and national permits. Banks associated with the programme are ICICI Bank, the State Bank of India (SBI), Axis Bank, Punjab National Bank, IDFC Bank, Paytm Payments Bank, Nagpur Nagarik Sahakari Bank, HDFC Bank, Union Bank of India, Yes Bank, Fino Payments Bank, Kotak Mahindra Bank, Bank of Baroda, EQUITAS Small Finance Bank, IndusInd Bank, Karuur Vysya Bank, Syndicate Bank, South Indian Bank, Punjab & Maharashtra Cooperative (PMC) Bank, City Union Bank, Federal Bank and Saraswat Bank.

In order to facilitate the availability of FASTags for ETC, NHAI has taken two revolutionary steps in consultation with the Reserve Bank of India and NPCI. These are online sale of FASTags and offline sale through common services centres near toll plazas. 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. Besides, a number of private banks have been offering FASTags to ensure easy availability to users. A cashback of 2.5 per cent is being offered by NHAI in 2019-20 in order to incentivise road users to use FASTags. Seeking to provide hassle-free and convenient services to FASTag users linked to the NHAI prepaid wallet, IHMCL has announced the introduction of a missed call alert facility for the NHAI prepaid wallet balance enquiry. The facility is free of cost and compatible with all mobile devices and operators.

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 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. The policy will also focus on building toll plazas outside cities to avoid protests and to set a time frame to end tolling on expressways and highways that have less than four lanes. Further, the policy will focus on pushing the electronic mode of collecting user fees by setting up the necessary facilities and offering a permanent discount in the fee that commuters pay using smart tags. Currently, the “pay-as-you-use” or closed tolling system is being implemented for the Eastern Peripheral Expressway and will be used for the Western Peripheral Expressway as well.

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, the high costs associated with OBUs can make it very expensive to deploy.

Another noteworthy technology involves the recognition of licence number plates and allows for toll deduction automatically. This technology is currently being 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, making it costly to deploy. It also necessitates the use of image storage devices. Besides, global navigation satellite systems 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 deployment of this technology is a challenge.

FASTag 2.0

The government has envisioned FASTag to be integrated with state toll plazas, city toll plazas, parking, fuel payments, vehicle-linked fines as well as smart city initiatives. The efforts are aimed at enhancing customer convenience. In this regard, MoUs for introducing FASTag on state highways via the National Electronic Toll Collection programme have been signed with the Uttar Pradesh Expressways Industrial Development Authority, the Maharashtra State Road Development Corporation, the Madhya Pradesh Road Development Corporation, Hyderabad Growth Corridor Limited, the Tamil Nadu Road Development Corporation, the Public Works Department of Haryana and Karnataka Road Development Corporation Limited.

Seeking 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 transaction processing. In a notable move, GMR Hyderabad International Airport Limited has introduced FASTag parking for its customers as a pilot project, in collaboration with the NPCI. The pilot project has been launched in two phases, the first being a controlled pilot testing, wherein only ICICI Bank tags would be used. The second phase of the pilot will cover all other issuer bank tags. This has been done to ensure the benefits of FASTag beyond tolling. Conceptualised as FASTag 2.0, it covers parking payments, fuel payments, etc. After its success in Hyderabad, the project will be launched at Delhi airport. Other banks such as SBI, Axis Bank, HDFC Bank and IDFC Bank are also in talks with airports in Mumbai and Bengaluru and a few malls to launch FASTag 2.0.

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