The Union road transport and highways ministry is set to overhaul the process of fixing user fees on national highway projects by ensuring that toll rates and toll plaza locations are approved before construction begins, a move aimed at preventing costly relocations and regulatory disputes after projects are completed, two people aware of the matter said.

According to one person, the ministry has directed that all proposals requiring relaxation under the National Highways Fee Rules, 2008, including relocation of toll plazas, must be examined by a newly constituted toll committee before construction starts.

The decision follows repeated instances of concessionaires constructing toll plazas only for authorities to later find that they violated prescribed location or distance norms, leaving little scope for corrective action.

The ministry flagged the core issue in a recent letter to all highway developers.

“The amendment represents a shift from a reactive approach, where compliance was examined after the toll plaza had already been built, to a preventive approach by ensuring compliance before construction,” said Sanjay Kumar Sinha, founder and managing director of Chaitanya Projects Consultancy Pvt Ltd. “This is expected to result in fairer tolling, reduced public inconvenience, better regulatory compliance and more efficient use of public funds.”

The ministry’s move builds on a detailed standard operating procedure (SOP) issued in December 2025 to streamline the toll notification process and align it with project implementation timelines.

The SOP mandates that agencies such as the National Highways Authority of India, National Highways & Infrastructure Development Corporation Ltd and state public works departments must initiate the toll notification process six months before project completion or once physical progress reaches 80%, whichever is earlier. By the time a project reaches 95% physical progress, the user fee notification must be finalized, approved and published in the Gazette of India.

Minimizing exemptions

For newly awarded projects, agencies must identify whether any relaxation under Rule 8 of the National Highways Fee Rules is required within six months of the appointed date. Similar approvals must be obtained before bidding for projects proposed to be monetized under the toll-operate-transfer or infrastructure investment trust (InvIT) models.

The SOP seeks to minimize requests for exemptions by encouraging agencies to explore alternatives such as redistribution of influence lengths (a stretch of road within which only one main fee plaza can be operated) and integration of toll plazas through FASTag-based systems and digital tolling technologies, or redesigning tolling arrangements to reduce inconvenience for road users. It also proposes a dashboard to monitor compliance with the prescribed timelines.

The ministry said the revised process will provide greater certainty to developers, reduce delays arising from post-construction changes and ensure smoother commissioning of highway projects while minimizing disputes over toll plaza locations, the second person said.

Suprio Banerjee, vice-president and co-group head at Icra Ltd, said the revised framework would reduce regulatory uncertainty for developers and lenders.

“The rationale for the change is to prevent changes after construction work, which entail much more effort and time, by moving the approval process to the pre-construction stage. Though it may increase procedural checks before construction, on an aggregate basis the change should lower post-construction regulatory uncertainty and improve the bankability of toll road assets,” Banerjee said.

Under the National Highways Fee Rules, toll plazas are generally not permitted within 60 km of another plaza or within 10 km of municipal limits unless a specific relaxation is granted.

Queries sent to the ministry of road transport and highways remained unanswered till press time. IRB Infrastructure Developers Ltd, one of India’s largest toll road developers, did not respond to requests for comment.

The Union road transport and highways ministry is set to overhaul the process of fixing user fees on national highway projects by ensuring that toll rates and toll plaza locations are approved before construction begins, a move aimed at preventing costly relocations and regulatory disputes after projects are completed, two people aware of the matter said.

According to one person, the ministry has directed that all proposals requiring relaxation under the National Highways Fee Rules, 2008, including relocation of toll plazas, must be examined by a newly constituted toll committee before construction starts.

The decision follows repeated instances of concessionaires constructing toll plazas only for authorities to later find that they violated prescribed location or distance norms, leaving little scope for corrective action.

The ministry flagged the core issue in a recent letter to all highway developers.

“The amendment represents a shift from a reactive approach, where compliance was examined after the toll plaza had already been built, to a preventive approach by ensuring compliance before construction,” said Sanjay Kumar Sinha, founder and managing director of Chaitanya Projects Consultancy Pvt Ltd. “This is expected to result in fairer tolling, reduced public inconvenience, better regulatory compliance and more efficient use of public funds.”

The ministry’s move builds on a detailed standard operating procedure (SOP) issued in December 2025 to streamline the toll notification process and align it with project implementation timelines.

The SOP mandates that agencies such as the National Highways Authority of India, National Highways & Infrastructure Development Corporation Ltd and state public works departments must initiate the toll notification process six months before project completion or once physical progress reaches 80%, whichever is earlier. By the time a project reaches 95% physical progress, the user fee notification must be finalized, approved and published in the Gazette of India.

Minimizing exemptions

For newly awarded projects, agencies must identify whether any relaxation under Rule 8 of the National Highways Fee Rules is required within six months of the appointed date. Similar approvals must be obtained before bidding for projects proposed to be monetized under the toll-operate-transfer or infrastructure investment trust (InvIT) models.

The SOP seeks to minimize requests for exemptions by encouraging agencies to explore alternatives such as redistribution of influence lengths (a stretch of road within which only one main fee plaza can be operated) and integration of toll plazas through FASTag-based systems and digital tolling technologies, or redesigning tolling arrangements to reduce inconvenience for road users. It also proposes a dashboard to monitor compliance with the prescribed timelines.

The ministry said the revised process will provide greater certainty to developers, reduce delays arising from post-construction changes and ensure smoother commissioning of highway projects while minimizing disputes over toll plaza locations, the second person said.

Suprio Banerjee, vice-president and co-group head at Icra Ltd, said the revised framework would reduce regulatory uncertainty for developers and lenders.

“The rationale for the change is to prevent changes after construction work, which entail much more effort and time, by moving the approval process to the pre-construction stage. Though it may increase procedural checks before construction, on an aggregate basis the change should lower post-construction regulatory uncertainty and improve the bankability of toll road assets,” Banerjee said.

Under the National Highways Fee Rules, toll plazas are generally not permitted within 60 km of another plaza or within 10 km of municipal limits unless a specific relaxation is granted.

Queries sent to the ministry of road transport and highways remained unanswered till press time. IRB Infrastructure Developers Ltd, one of India’s largest toll road developers, did not respond to requests for comment.