Emerging Tolling Technology and implementation Challenges

The current challenges in the overall ETC ecosystem, it is to make barrier-free tolling system. It has been successfully implemented in many developed countries, the only difference that we have from the other countries is the high level of enforcement they are having.

Till the time we address the enforcement issue, we cannot have a barrier-free tolling system in India because without it, the concessionaires will take the hit on account of default by customers. Obviously, positive steps for integration with VAHAN database. But if you don’t have proper enforcement, how will one manage the non-payment risk. Today, all the banks who are providing a FASTag, operate on a prepaid model. Gradually, when this program will mature, it will get into a postpaid or also it will get into a credit kind of a model but as of now it is prepaid model.

For any new ETC technology, integration with the current system is the first issue. A lot of people come with mobile-based or other solutions. The first challenge for them is how to identify the vehicle and the second is how to integrate it with the existing toll plaza system. Because, a concessionaire cannot run multiple systems parallelly. He can’t run a FASTag system, and a GPS system all together unless and until at the backend, all the systems are talking to his one single TMS. So that is the challenge.

With this perspective, we need to understand why India chose RFID technology in the first place. There are five important parameters which need to be addressed by any ETC technology. The first is vehicle identification, the second is vehicle classification, the third is obviously the entire transaction processing and the fourth is the most important thing, the violation processing. This is something the new technologies are missing out. In the absence of our proper integration with VAHAN database, there will always be violation cases, which simply means the discrepancy in the vehicle classification, ie the vehicle is identified as a car but the actual vehicle which crossed the toll plaza was a truck. So, in all such violation cases, the concessionaire raises a subsequent debit adjustment to cover his losses. These problems need to be addressed.

The fifth parameter is Connectivity and Cost. Connectivity was a major problem in 2010, but it has got sorted out to some extent. At least from a connectivity point of view, 90% of the plazas have a good connectivity. RFID technology encompasses all the five critical factors, but the cost of implementation is the lowest for RFID technology, and hence was the deciding factor for India.

Looking at how FASTag programme has fared till now, we are covering 430+ Toll Plazas . Out of these, only seven Toll Plazas are under state, all the rest are on National Highways. This is one of the current limitations. Till the time we cover all the state highways, this program is not going to take off in a big way. The recent notification of MoRTH, making FASTag mandatory on all vehicle sold after Dec 2017, has really played a huge role in increasing the sales of FASTag , and 30 lakh tags are already been sold out.

As on November 2018, NETC system has successfully processed 262 million transactions amounting to Rs 614 million. This is huge and the current penetration is almost at 25% that is 25% of all the toll value that is collected comes through FASTag. There are 21 banks who are issuing FASTag, there will be more banks which would be joining in.

The daily average tag issuance is in the range of around 8000 tags. The daily transaction that happens is almost in the range of almost 7 lakh transactions per day. In December 2016, it was 30,000 transactions a day. So, in just 19 months, it has jumped to seven lakh transactions, it could have gone further but obviously there are more issues that we need to address fast.

The current average ticket size is around Rs 228. The national average ticket size is around Rs.160, indicating it is the heavy vehicles which have adopted this technology more than the retail customers.

We started issuing more number of FASTags post December 2017. But if you look at the transactions, it has not grown that much, purely because bulk of the vehicles sold are cars, and they will only get activated once we have city and at state Toll Plazas under FASTag. In a city like Mumbai, we have five Mumbai entry points and Worli- Sealink and FASTag is not accepted there. So, unless and until we have an integration of all these players in the ecosystem, the transaction graph can grow only organically.

We envision that FASTag would be used for multiple things in future, not only for toll payments but also for everything else which can be linked to a vehicle; it FASTag would be used for multiple things in future, for parking payments or enforcement payments. If you must really issue a challan to a vehicle rather than asking for a debit card or a credit card, FASTag can make the payment. Even fuel payments are something which can be looked into the future.

The focus for the future is to activate the state and city Toll Plazas . We want to go live with Mumbai and Hyderabad cities; we will also be exploring options like Bangalore because there, once the customer starts using it, we will get into the second phase. As part of the plan for integration, we are already co-ordinating with GSTN, with Border security posts and with VAHAN database to integrate all of it with our server. So, the whole concept is that as a programme, this will be open to the future alternative technology as and when it comes.

Muraleemohan M: Electronic Toll Collection has been the single largest digital intervention from the government side which has helped us avoid a lot of headache at many of the Toll Plazas . This was piloted first in one of our Toll Plazas way back in 2013, in Vadodara to Baruch. From 2013 to the December of 2016, we did two percent of our revenues through FASTag and from December 2016, mainly because of demonetisation, it has been going up every month. Most of our Toll Plazas are doing in excess of 30% of revenues in FASTag, and on an average, we are doing about 25%.

There are multiple challenges as far as the technology adoption is concerned. We are seeing the adoption more in the case of commercial vehicles and less on cars and that is one of the concerns. We tried to do some work with the 188 toll lanes that we have enabled FASTag as to why this has been happening. One key learning is that we don’t have regular long-distance car drivers in this country who pass multiple Toll Plazas where they see a benefit in FASTag. The FASTag numbers have not picked up even though the RTO has made it compulsory. Most Car registrations happen in cities and many do not pass through a single toll plaza because the daily work does not require them to go beyond the city and pass a toll plaza.