CareEdge Warns of Revenue Impact from MoRTH’s ₹3,000 Toll Pass for Private Cars

CareEdge Ratings has raised key considerations around the Ministry of Road Transport and Highways’ (MoRTH) newly announced fixed-fee toll pass for private passenger vehicles (PPVs). Priced at ₹3,000 and valid for up to 200 trips annually, the toll pass will be implemented from August 15, 2025, and is expected to lower user costs but pressure toll road operator revenues.

According to CareEdge, the move could lead to a 7–8% decline in toll revenues for national highway (NH) stretches dominated by passenger vehicle traffic. This projection is based on a sample analysis of 5,000 km of NH toll roads, where cars contribute about 20% of toll income, with certain peripheral or tourist-oriented routes seeing car contributions exceed 40%.

CareEdge notes that the scheme significantly reduces per-km toll rates—from ₹1.60 to ₹0.30 for users making full use of the 200-trip limit—leading to savings of up to 80% for frequent travellers. While this supports commuter affordability and highway decongestion, it introduces a new variable for the tolling ecosystem.

Crucially, CareEdge emphasizes that this toll pass rollout is likely to be treated as a “Change in Law” under concession agreements. This would necessitate financial compensation to private toll road operators by the authority. The estimated compensation, depending on adoption levels and traffic mix, could range between ₹3,000–5,000 crore annually.

CareEdge warns that timely and adequate reimbursement will be critical to prevent stress on leveraged projects, though most NH assets maintain a three-month Debt Service Reserve Account (DSRA) as a buffer. Infrastructure Investment Trusts (InvITs), due to their diversified revenue and lower leverage, are seen as better positioned to absorb short-term impacts.

The rating agency also pointed out that bidders for upcoming toll projects will need to adjust financial projections and risk models in light of this fixed-fee mechanism, making it a critical consideration in future bid strategies.