NETC - Adding Speed To India’s Highway Network

By Denny Thomas  - AVP-NETC, NPCI

Technology is created by humans, to add to the benefits one can reap out of advanced applications, be it at work, home, banks or on the road. We are standing at a pivotal moment in the history of digital transformation in India. Revolutions are happening across every industry, sector or elements comprising the society that we live in. To think of ease of everything in life, ever imagine toll lanes free of looming queues?

Standing at endless queues leading up to one tiny toll collection booth on busy highways is an everyday trouble in the connected cities of today. Traveling to the main city from suburbs or for heading out on a roadtrip, toll lanes are a complete nightmare to most. To solve this problem, Electronic Toll Collection (ETC) systems are completely changing the way various toll plazas operate, whether run by the National Highways Authority of India (NHAI) and private operators (Concessioners). The agents of change – going cashless, less congestion & substantial savings to both road users as well as plaza operators are the main catalysts enabling this initiative. Many wold be surprised to know that India has the second largest road network across the world at 5.4 million km. This road network transports more than 60 per cent of all goods in the country and 85 per cent of India’s total passenger traffic. India is also the fourth largest in the world in terms of motor vehicle manufacturing and Indian auto manufacturers alone produced 25.3 million motor vehicles in the year 2016-17.* The number of registered motor vehicles is spiralling every day, including passenger vehicles. Additionally with the growing interest in electric vehicles, light weight two wheelers and innovation in the automobile engineering field will only push the numbers higher. The implication is towards the possibilities of reducing traffic woes by implementing an efficient toll collection and management system at a nationwide scale.

The implementation of ETC program in India was initiated by Ministry of Road Transport & Highway (MoRTH) by setting up a committee under the chairmanship of Mr. Nandan Nilekani with a mandate to examine all technologies available for ETC and to recommend the most suitable one for implementation throughout India. The first ETC system was put up on Mumbai-Ahmedabad Highway in April 2013, which allowed vehicles to sail through six toll plazas, operated by three different road developers -- Larsen and Toubro (L&T), IRB Infrastructure & NHAI. This was a closed loop solution implemented in partnership with ICICI Bank wherein the issued RFID Tags also known as FASTag, would only work on ICICI Bank acquired Toll Plazas. This nationwide roll out was augmented further when NPCI stepped in to set up a central clearing house for transactions received from all toll management systems.

Interoperability, as it applies to NETC system, encompasses a common set of processes, business rules and technical specifications which enable a customer to use his/her RFID Tag as payment mode on any of the toll plazas irrespective of who has acquired it. The current National Electronic Toll Collection System (NETC System) hence is responsible for Transaction Processing, Clearing and Settlement, Dispute Management and a Mapper for capturing Vehicle details, involving key stakeholders in the like the Customer, Toll Plaza Operator (concessioners), Acquiring Bank, Issuing Bank and the Central Clearing House (CCH).

ETC has been operational in Europe since 1987 and in the U.S. since 1990. Today, such systems collect more than 50% of all toll revenues, and for some systems, the figure is close to 80%. Although ETC continues to develop in the U.S. and Europe, they are still struggling to make it completely interoperable in their respective geographic areas. Given this background, the NETC program has made some significant progress and achieved quite a few milestones within just eleven months of its operations. This needs to be viewed with a background of other ETC implementation across the globe, some of them are as below:

  • NETC program is live on 375 toll plazas across the country.
  • At this scale it is world’s first interoperable system, covering 76 concessioners, 16 system integrators and 11 Banks, with a provision to add many more issuers and acquirers.
  • Collectively issuer banks have issued 6.85 lakh tags till September 30, 2017.
  • Daily transaction volumes have been steadily growing from 30 thousand daily transactions in December 2016 to a daily average of 3.38 lakh transactions in September 2017.
  • Overall 76 million successful transactions have been processed since the launch of the pilot amounting to over Rs. 2,000 crore.
  • Achieved 16 per cent penetration which means, 16 per cent of the total volume of toll collections are now through NETC programme.

Successful ETC deployment across the world has saved travel time, improved air quality and made payment of tolls more convenient for millions of people. For the success of NETC program, it is important that all the four pillars- issuers, acquirers, NPCI and plaza operators (NHAI/concessioners) stand strong together. 

Toll plaza is where the customer actually experiences the ETC service and this needs to be improved continuously. Greater issuance, acceptance and awareness about a service that reduces on-road time considerably will drive penetration for ETC tag adoption among the masses. This will not only help the end consumer but create an opportunity for new age thinkers to carve profitable business models. The implications of a nationwide sweep with ETC Toll Plazas will open up multiple business opportunities and FASTags can be looked for other use cases like payments for parking, fuel, and enforcements (traffic fines) or any other vehicle linked payments.

*Source: MORTH yearly data 2016