Toll Plaza Scam in Tamil Nadu – When will scams come to an end?

By Harshpreet Kaur

Published On: October 27, 2021 at 13:45 IST

Introduction

All roads in India or anywhere in the world have Toll plazas to collect road tax from people using it on a daily basis or occasionally. These roads are known as toll roads and such fees are called toll.

Generally, roads are built with the taxes we pay to the Government, but Government does not have enough time, money, and labour to build roads and highway and also Government have lot of work to do, thus, these projects are now given to Private Sector and are made in Public Private Partnership (PPP) model. Public Private Partnership is an arrangement in which a government and private-sector companies collaborate or come together to implement and maintain infrastructure services or assets.

Since the establishment of National Highway Authority of India (NHAI), it has been working for the development, maintenance, and management of National Highways. To let the private players, enter the market, The National Highways Act, 1956 was amended in 1995 for better development, maintenance and operation of highways. The Government initiated several other measures in this direction such as declaration of road sector as industry to facilitate borrowing on easy terms.

Who Collects Toll?

The basic rule is that who builds the highway, will open up a toll booth and collect the toll. PPP models are of various kind, since PPP model are used to build infrastructure projects, it will depend upon the model, the company and the government agreed thereto. However the model which is commonly used by government is Build-Operate-Transfer (BOT).

Under this model the private-sector partner uses his own finance, design, and have all the authority and after completion of the road set up toll booth to charge user fees known as toll for a specific period of time say about 20-30 Years, and after their cost with profit are recovered they hand over the ownership to the government.

The Companies do not charge from government instead take up the project for 20-25 yeaRs. and set up toll booths to charge tolls to recover the cost of construction and maintenance of such roads and highways from the road users. The toll is collected either by NHAI or the private firm that built the road. The Companies takes loans from various Banks that run into tens of thousands of crores, it is with the toll money that the companies repay the loan and realises a profit.

To regulate the determination of rates, rules were made which are known as National Highway Fee (Determination of Rates and Collection) Rules, 2008, according to which user fee is ought to be reduced by 40% on realisation of the entire project cost.

If payments are not accounted for, the realisation of the project cost gets delayed, allowing toll operators to collect a high user fee even after the concessionaire agreement ends, which results in getting the money directly in the pockets of companies without the government knowing it resulting high amount of profits which can run into hundreds of crores.

What happened in Tamil Nadu?

A Right to Information (RTI) was filed by TNIE to get the data of the toll collection at PARANUR which is as follows:

After the data was collected, it was observed that, in July 2021, about 12.47 lakh vehicles passed the toll gate, which means there was increase in vehicles by 7.39 lakh compared to same month in 2019.

Since February 15, 2021, the toll was only collected through the FASTag system. This comparison of data clearly indicates that a few lakhs motorist’s fees could have been kept off the records at the toll gate every month in 2019, and perhaps even before, this false data shows crores of rupee have been swindled every year.[i]

GR Shanmugappa, general secretary, South India Motor Transport Association (SIMTA) said, “If we do a similar assessment for all toll gates for the past 10-15 years, the toll-collection scam would run into several hundred crores. There should be an inquiry into this.”

This is not the first time such a fraud is exposed instances of swindles in toll plaza are witnessed in the past as well. One such scam happened in Belagavi on NH-4, where in a RTI application was filed by Prashant Ashok Burge regarding collection of excess user fee at Hattargi on the Belagavi-Maharashtra border, when NHAI investigated the matter, it was found that, user fee being collected for car/jeep/van (LMV) was Rs. 20 and Rs. 40 instead of the prescribed Rs. 15 and Rs. 35, respectively, an excess of Rs. 1.8 crore was recovered from the agency, Konark Infrastructure.
[ii]
Another instance is of Uttar Pradesh wherein the private companies operating the toll plazas of the National Highway Authority of India committed a fraud which ran into Rs. 287 crore, the companies evaded stamp duty and such cases have been reported from 29 districts across the state.[iii]

What is FASTag?

FASTag is an electronic toll collection system, operated by the NHAI, it is affixed on the windscreen of the vehicle and works on radio frequency identification (RFID) technology for making toll payments directly, when the vehicle crosses the toll gates.  It does not have any expiry date and thereby allowing the customer to use it as long as it does not get tampered, through this system a customer can make the payments directly from the account which is linked to FASTag.

What is the solution?

The scams can be exposed in two folds,

• First is through RTI, The Right to Information (RTI) is an act of the Parliament of India, Right to information Act, 2005 through which any citizen of India may request information from a “public authority”. Scams exposed through RTI can be seen in the above 2 cases of Uttar Pradesh and Tamil Nadu, but this way is not so useful as one has to take a step forward to investigate the matter compare the data and for every toll plaza one cannot keep on filing RTIs to check whether any fraud is going on or not.
• The second way is through FASTag, which is a better and continuous way to cater the problem of swindle. Fastag has brought in transparency and thus lessen the chance of committing the fraud at the first place. FASTag is beneficial both to government as well as end users, now the customeRs. need not have to wait at long lines, it’s a hassle-free exercise and also save fuel.

Problems involved with FASTag

Although Government are trying to cater the problems faced in toll plaza by enforcing FASTag on vehicle useRs. on national highways, the number of complaints, especially about wrong deduction from the user’s account, are steadily increasing.

As per data shared by Ministry of Road Transport & Highways (MoRTH)

“For the week between 25th to 31 January 2021, there were 8,324 complaints received on its 1033 toll free number about FASTag and toll plaza. Out of this, nearly 25% or 2,006 complaints were related with FASTag getting blacklisted and 811 complaints were resolved or in other words as many as 60% of the complaints could not be resolved.”

“It was followed by 996 complaints received about FASTag deduction without consent or travel, and about 30% or 322 complaints were closed. Interestingly, there were 1,349 complaints about physical (cash) payment as well as deduction from the FASTag account, and almost 50% of such complaints remained unresolved.”[iv]

The problem further increased when “Fake FASTags” started to sell by fraudsters, NHAI has cautioned vehicle useRs. from buying FASTag online from unauthorised sellers, it says, “Some fraudsteRs. are selling FASTags online, making them appear to be as those of NHAI or Indian Highway Management Co Ltd (IHMCL). They are selling fake FASTags which are not valid to cross toll plazas.”

What is the future?

On August 11, 2021, Nitin Gadkari, Union Minister of Road Transport and Highway, said that, “Within three months, we are going to finalize the technology for replacing toll plazas in the country, which is going to save us hundreds of crores and make travel hassle-free for the commuters.”
He also said that, “To reduce vehicular congestion on existing highways, we are focusing more on Greenfield expressways. Across these green alignments, we want to develop logistics parks, smart cities, industrial hubs and infrastructure clusters,”[v]

Let us hope for the best for these upcoming new projects and ideas with no corruption or zero corruptions.

Conclusion

To promote FASTag Ministry of Road Transport and Highways (MoRTH) said that, “To further promote fee payment through digital mode, reduce waiting time and fuel consumption, and provide a seamless passage through fee plazas, it has been decided that all the lanes in the fee plazas on National Highways shall be declared as ‘FASTag lane of the fee plaza’ with effect from midnight of 15th/16th February, 2021,”[vi] , thereby mandating FASTag from Feburary 16, 2021 thus, any vehicle without a FASTag, or an invalid FASTag entering into the FASTag lane would be liable to pay two times the fee applicable at the toll plaza.

No doubt, technologies come with their own advantages and disadvantage, FASTag brought in some disadvantages and gave chance to fraudsters to do online frauds but at the same time it will help to reduce corruption and ease lives of people.

It is just that it needs support from the government authorities as well as at the ground level, especially from people who are implementing this. At present, many vehicle useRs. are blaming the FASTag infrastructure, or rather the lack of it to an adequate degree being in place at toll plazas but the government, on the other hand is also trying to cope up with challenges coming on their way.

ABOUT THE AUTHOR 

Harshpreet Kaur is a final year student of LL.B. at Lloyd Law College. She has completed CS Executive and has won 1^st Prize in Tax Quiz as well as Company Law Quiz. She is a very creative, responsible, self-motivated and practical person. She chose law as a career because she believes law is very interesting and she is working in this field to make the law interesting for others as well using platforms like YouTube on hp tales and Instagram on hp.tales.

Edited by: Aashima Kakkar, Associate Editor, Law Insider

References

• FAStag Product overview  
• About NHAI
• International Transport forum, “Public Private Partnership in National Highways: Indian Perspective”

[i] “False data, money swindling: RTI data hint at massive toll-gate scam in Tamil Nadu” (Last visited on October 6, 2021)

[ii]  “RTI activist rewarded for exposing toll scam” (Last visited on October 6, 2021)

[iii]  “UP Toll Plaza Fraud: Private Companies Evade Stamp Duty of Rs 287 Crore” (Last visited on October 6, 2021)

[iv] Yogesh Sapkal, “FASTag Wrong Deductions: Why Complaints Are Not Getting Resolved Sooner?”, (Last visited on October 6, 2021)

[v] Ashutosh Mishra, “In 3 months, GPS technology to replace physical toll booths will be finalised: Nitin Gadkari” (Last visited on October 6, 2021)

[vi] Naveen Kumar, “FASTag now mandatory: Details on how to get one, charges” (Last visited on October 6, 2021)