NHA to Raise Highway & Motorway Toll Rates Due to Inflation

National Highway Authority (NHA) has proposed up to 8 percent increase in toll rates for commuters using national highway and motorway, besides an additional surcharge of up to Rs 50 for cash transactions through electronic toll collection while pleading that inflation rate has increased by 4.3% in 2017, it is learnt.

According to available documents, NHA’s roads comprise 4.6% of Pakistan’s entire road network, but carry more than 80% of the country’s traffic. The rate of inflation is an important macroeconomic indicator used to determine the toll rates.

Since toll rates do not match the ever-increasing repair & maintenance costs, and that also almost 40% of NHA network is not tolled, however it still has to be appropriately maintained. NHA is unable to meet the growing needs and this is widening its maintenance backlog.

Inflation Rises

The country’s economy historically faces inflationary pressures. The surge in food and commodity prides pushed the Consumer Price Index (CPI) to higher levels. The non-food component also increases throughout the course of the fiscal year owing to the transport group, fuel and lighting group, reveal NHA’s documents.

NHA has presented three points to justify the proposed increase while saying that

• inflation rate in Pakistan has increased by 4.3% in 2017 as compared to previous year 2016 2.86%. Therefore, to cope with the increased maintenance cost the toll rate on national highways and motorways are required to be rationalized.
• for upkeep, periodic/ routine/ emergency maintenance, geometric & highway safety improvements, corridor management of NHA network throughout a year rationalization of toll rates is required.
• The rationalization of rates was due on 1st July, 2017 but was withheld due to
  • pursuant to toll rates rationalization in 2014, resistance from House of Senate, commuters, transporters and general public was witnessed
  • toll revenue due to present management’s actions is already witnessing upward trends due to strict enforcement and controls 2015-16 (5.8%), 2016-2017 (7.2%).
  • System of cashless transactions was being worked out and designed, which requires innovative tariff structure
  • Current political situation in the country and election year.

It is therefore proposed that toll rates should be rationalized for national highways and motorways w.e.f. 1st July, 2018 for a period of 3 years.

• The existing rate for car on Islamabad-Peshawar motorway is Rs 210 while the proposed rate should be Rs 230.
• On Pindi Bhattian-Faisalabad it is Rs 90. The proposed rate should be Rs 100.
• For Faisalabad-Gojra, the existing toll is Rs 90 whereas it should be Rs 100.
• The same rates as above are proposed for Khanewal-Multan.
• For articulated trucks existing rate on Islamabad-Peshawar is 1120 and proposed is Rs 1210,
• On Pindi Bhattian-Faisalabad it is Rs 430 and proposed Rs 460.
• The same is proposed for Faisalabad-Gojra while existing on Khanewal-Multan is Rs 410 and proposed Rs 440.

For wagon up to 12 seater existing rate on Islamabad-Peshawar is Rs 350 and proposed is Rs 380. On Pindi Bhattian-Faisalabad it is Rs 130 and proposed Rs 140. The same is proposed for Faisalabad-Gojra and Khanewal-Multan.

For wagon 13-24 seats coaster/mini bus existing rate on Islamabad-Peshawar is 490 and proposed is Rs 530. On Pindi Bhattian-Faisalabad it is Rs 190 and proposed Rs 210. The same is proposed for Faisalabad-Gojra while existing on Khanewal-Multan is Rs 180 and proposed Rs 190.

An additional surcharge of Rs.20 shall be charged for car, wagon, coaster and minibus for paying through cash and Rs.50 shall be charged to buses and trucks for cash transactions w.e.f. the date of commencement of electronic toll collection on NHWs and MWs. Revenue generated from this surcharge shall be used for payment of insurance premium for E-Tag commuters.

Fixed toll regime may be introduced for cars having E-Toll Tag w.e.f. the date of commencement of electronic operations.

A discount in toll rates (5% for corporate and 10% for non-corporate, rounding off to the nearest ten on higher side) may be given to corporate clients for registration and operations under electronic tolling w.e.f. the date of commencement of electronic operations on NHWs.

Further 100% discount in toll rates may be allowed to category of commuters and 50% discount in toll may be allowed to category of commuters w.e.f. the date of commencement of electronic operations on NHWs.